Question

Direction: Read the following scenario and answer the THREE questions that follow.
Dhan, a poor but enterprising 15-year-old, resided in the world’s largest slum in a metropolitan city, along with her widowed mother. The densely packed slum housed about a million people, mostly in rickety one room tenements, connected by labyrinthine lanes and by-lanes. Dhan’s mother worked intermittently as a daily wager in a small savoury factory. For a 15-year-old, Dhan’s life was hectic. She spends two hours every day in fetching water for the household, packing breakfast and lunch for her mother. In addition, she had to prepare supper. On her mother’s insistence, Dhan also attended an evening bridge school run by an NGO. Dhan’s dream was to provide a comfortable life to her mother and take her family out of poverty. Of late, Dhan observed that the customers to a nearby tea-cum-savoury stall (TCS), were mostly the slum dwellers, who thronged the stall for its low prices and lack of alternatives. Further, Dhan gathered that the TCS could not cater to all of its customers, and the owner still made a neat Rs.800 profit per day. Dhan saw that a probable first step towards her family’s economic independence could be to own her own TCS.
Within two years of establishment, Dhan’s TCS is not only outcompeting its nearest rivals in the slum but has also earned a goodwill for the quality and taste of its products. Hence, it has become famous within the slum as “Dhan Dhana Dhan” brand. Dhan now aspires to expand the reach of her savouries into the metropolitan region. Dhan wishes to scale up her savoury production from 100 kg to 1000 kg per day while maintaining quality. Dhan realizes that her establishment does not have the space for expansion on its own.
Which of the following options will BEST help Dhan to scale up production with least investment, tightly control quality, and also protect her business interests?

• A. Stop catering to the slum dwellers and start serving the metropolitan region exclusively
• B. Outsource the production, along with secret recipes, to a mass savoury production unit outside the slum
• C. Buy additional space within the slum and establish own manufacturing unit
• D. Lease space in the metropolitan region and establish a manufacturing unit of TCS
• E. Provide the savoury dough and preparation instructions to 100 willing women in the slum and co-opt them as business partners

Answer 1

Answer: (E)

We have to look for the best option to scale up production taking the following parameters into consideration:
- least investment
- tight quality control
- protecting business interests
A does not guarantee any of the three.
Outsourcing the production might not ensure quality control and sharing secret recipes might not be in the interest of the business. Hence, B doesn’t help.
C and D require a lot of investment.
E will best help Dhan.
This option involves least investment as no manufacturing unit is being set up. Providing savoury dough and preparation instructions ensure quality control. Co-opting the women as business partners ensures protection of business interests.