Joe Sullivan and Mark Holland, Members of the Top Management

question 42

Multiple Choice

Joe Sullivan and Mark Holland, members of the top management at EuAir, an European airlines, were preparing for a meeting to discuss strategies to combat the recent rise in fuel prices. Before the meeting began, Joe and Mark were discussing how oil prices significantly impact the health of the world economy. Joe spoke of how higher oil prices since 1999, partly the result of OPEC supply management policies, contributed to the global economic downturn in 2000-2001. Mark agreed but added that the right kind of strategy can help them overcome and even profitably use this opportunity for hiking fares. Which of the following statements, if true, would weaken the argument that Joe experienced groupshift during the meeting?

• A) Joe stated that precise methods of fuel filling and consumption must be implemented to efficiently use their current supply of fuel.
• B) Joe stated that hiking prices would lead to losing market share to the low-cost airlines which already controlled half the market.
• C) Joe stated that the company should cut expenditures on other areas like marketing and advertising instead of hiking fares to retain their current profit margins.
• D) Joe proposed the usage of direct and higher altitude routes that would curtail fuel consumption.
• E) Joe suggested adding a fuel surcharge to all tickets for commercial flights with immediate effect.

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Definitions:

Inventory

The raw materials, work-in-process products, and finished goods that a company holds for the purpose of sale in the near future.

Marketable Securities

Financial instruments that can be easily converted into cash, such as stocks, bonds, or treasury bills.

Operating Activities

Activities that relate directly to the primary business operations of a company, such as selling products or providing services.

Financing Activities

Transactions that involve raising capital for the business and repaying investors, such as issuing debt and equity or paying dividends.