Joe Sullivan and Mark Holland, Members of the Top Management

question 38

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 Mark experienced groupshift in the meeting?

• A) Mark felt that implementing a price rise was necessary to recover the costs in operating the flights.
• B) Mark stated that the company should increase operations but at lower fares so they can regain control over the market share.
• C) Mark believed that most of their clientele was not price sensitive.
• D) Mark was of the opinion that oil suppliers were going to pressure them even more in the future and the company had to resort to alternatives like bio fuels.
• E) Mark recommended that the company should establish a fuel hedging contract with its key suppliers to ensure protection from fuel price rises.

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Definitions:

Deviations

Statistical variances or differences from a central value, such as the mean, indicating how spread out data points are.

Mean

A statistical measure of central tendency, commonly understood as the average value of a set of numbers.

Expected Return

The anticipated amount of gain or loss that an investor can expect from an investment, based on historical or projected returns.

Real Return

The profit or loss on an investment adjusted for inflation, reflecting the actual purchasing power of the return.