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Course of Action - Verbal and Reasoning

Directions to SolveIn each question below is given a statement followed by three courses of action numbered I, II and III. You have to assume everything in the statement to be true, then decide which of the three given suggested courses of action logically follows for pursuing.
Q1:

Statement: The Company X has rejected first lot of values supplied by Company A and has cancelled its entire huge order quoting use of inferior quality material and poor craftsmanship. Courses of Action:
  1. The Company A needs to investigate functioning of its purchase, production and quality control departments.
  2. The Company A should inspect all the valves rejected by Company X.
  3. The Company A should inform Company X that steps have been taken for improvement and renegotiate schedule of supply.

A Only I and II follow

B Only II follows

C II, and either I or III follow

D All I, II and III follow

E None of these

ANS:A - Only I and II follow

Explanation: First of all, company A should inspect the rejected valves to ensure if they are really sub-standard. If yes, it should scrutinise its working thoroughly and remove its lackenings, be it in the quality of raw material or craftsmanship. So, both I and II follow. III seems to be a far-off action which can be implemented only after the first two steps are put into practice. Thus, III does not follow,