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MODEL QUESTION PAPER - 3 SECTION I – ANALYSES OF BUSINESS SITUATIONS Directions: There are two passages in this section. Read also the directions for answering questions under the passage before answering. FIRST PASSAGE The Parks company, located in New York City, had engaged exclusively in the manufacturer of baking powder in the seventy -five years since its founding. Sales were approximately $800,000 annually. The sales volume, measured in commodity units instead of dollars, had showed a decline of about 11 percent over the past decade. The company had a small office force and employed approximately 50 people in the production process, which was divided into (1} the mixing department (2) the assembly department, and (3) the final inspection and packing department. In 1935, distribution had been foreign as well as national. Forty years later, the sale of the product was confined to New England and the Middle Atlantic states. Mr. Andrew H. Pendler, the president, attributed this significant decrease in both market area and sales volume to high train rates, sterner competition and trade dislocations caused by World War II. Mr. Gordon Janis, the sales manager, after studying the market closely, arrived at a different set of reasons why sales had been dropping. In the first place, according to Janis sales to commercial consumers had diminished to practically nothing. Many modern bakeries bought the necessary chemicals and manufactured their own baking powder. Secondly, the population had become urbanized. Formerly, when a larger portion of the citizenry was suburban, many housewives had done their own baking. People in cities were close to bakeries and other outlets where they could buy the finished product, and improved transportation had enabled fresh bakery products to be readily available at retail outlets. The third reason which Mr. Janis considered significant was the

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