• e-gmat Exclusive Offer
    Get 300+ Practice Questions
    25 Video lessons and 6 Webinars for FREE

    Available with Beat the GMAT members only code

    MORE DETAILS
    e-gmat Exclusive Offer
  • Target Test Prep
    5-Day Free Trial
    5-day free, full-access trial TTP Quant

    Available with Beat the GMAT members only code

    MORE DETAILS
    Target Test Prep
  • Varsity Tutors
    Award-winning private GMAT tutoring
    Register now and save up to $200

    Available with Beat the GMAT members only code

    MORE DETAILS
    Varsity Tutors
  • Veritas Prep
    Free Veritas GMAT Class
    Experience Lesson 1 Live Free

    Available with Beat the GMAT members only code

    MORE DETAILS
    Veritas Prep
  • Magoosh
    Magoosh
    Study with Magoosh GMAT prep

    Available with Beat the GMAT members only code

    MORE DETAILS
    Magoosh
  • Economist Test Prep
    Free Trial & Practice Exam
    BEAT THE GMAT EXCLUSIVE

    Available with Beat the GMAT members only code

    MORE DETAILS
    Economist Test Prep
  • PrepScholar GMAT
    5 Day FREE Trial
    Study Smarter, Not Harder

    Available with Beat the GMAT members only code

    MORE DETAILS
    PrepScholar GMAT
  • EMPOWERgmat Slider
    1 Hour Free
    BEAT THE GMAT EXCLUSIVE

    Available with Beat the GMAT members only code

    MORE DETAILS
    EMPOWERgmat Slider
  • Kaplan Test Prep
    Free Practice Test & Review
    How would you score if you took the GMAT

    Available with Beat the GMAT members only code

    MORE DETAILS
    Kaplan Test Prep

OG2016 - A manufacturer of a certain

This topic has 1 expert reply and 1 member reply
boomgoesthegmat Senior | Next Rank: 100 Posts Default Avatar
Joined
25 Apr 2016
Posted:
93 messages
Thanked:
1 times

OG2016 - A manufacturer of a certain

Post Sun May 01, 2016 9:33 am
Elapsed Time: 00:00
  • Lap #[LAPCOUNT] ([LAPTIME])
    A manufacturer of a certain product can expect that between 0.3 percent and 0.5 percent of the units manufactured will be defective. If the retail price is $ 2,500 per unit and the manufacturer offers a full refund for defective units, how much money can the manufacturer expect to need to cover the refunds on 20,000 units?

    (A) Between $15,000 and $25,000
    (B) Between $30,000 and $50,000
    (C) Between $60,000 and $100,000
    (D) Between $150,000 and $250,000
    (E) Between $300,000 and $500,000

    OA: D

    Need free GMAT or MBA advice from an expert? Register for Beat The GMAT now and post your question in these forums!
    Post Sun May 01, 2016 1:45 pm
    boomgoesthegmat wrote:
    A manufacturer of a certain product can expect that between 0.3 percent and 0.5 percent of the units manufactured will be defective. If the retail price is $ 2,500 per unit and the manufacturer offers a full refund for defective units, how much money can the manufacturer expect to need to cover the refunds on 20,000 units?

    (A) Between $15,000 and $25,000
    (B) Between $30,000 and $50,000
    (C) Between $60,000 and $100,000
    (D) Between $150,000 and $250,000
    (E) Between $300,000 and $500,000

    OA: D
    Let's first determine the lower end of the range. So, we'll find 0.3 percent of 20,000
    We know that 1% of 20,000 is 200, which means 0.1% of 20,000 is 20
    If 0.1% of 20,000 is 20, then 0.3% of 20,000 is 60
    So, at the lower end, there will be 60 defective units.
    If each unit costs $2500, then the lower end of refunds = (60)($2500) = $150,000

    Check the answer choices...D!

    Cheers,
    Brent

    _________________
    Brent Hanneson – Founder of GMATPrepNow.com
    Use our video course along with Beat The GMAT's free 60-Day Study Guide

    Check out the online reviews of our course
    Come see all of our free resources

    GMAT Prep Now's comprehensive video course can be used in conjunction with Beat The GMAT’s FREE 60-Day Study Guide and reach your target score in 2 months!
    OptimusPrep Master | Next Rank: 500 Posts
    Joined
    13 Mar 2015
    Posted:
    410 messages
    Followed by:
    7 members
    Thanked:
    120 times
    GMAT Score:
    770
    Post Mon May 02, 2016 7:21 pm
    boomgoesthegmat wrote:
    A manufacturer of a certain product can expect that between 0.3 percent and 0.5 percent of the units manufactured will be defective. If the retail price is $ 2,500 per unit and the manufacturer offers a full refund for defective units, how much money can the manufacturer expect to need to cover the refunds on 20,000 units?

    (A) Between $15,000 and $25,000
    (B) Between $30,000 and $50,000
    (C) Between $60,000 and $100,000
    (D) Between $150,000 and $250,000
    (E) Between $300,000 and $500,000

    OA: D
    Range of defective units = 0.3% of 20,000 to 0.5& of 20,000 = (60, 100)
    Price range of returns = (60*2500, 100*2500) = (150000, 250000)

    Correct Option: D

    _________________
    Ankur
    99th Percentile GMAT Tutor | Optimus Prep™

    Optimus Prep™ GMAT Courses:
    www.Optimus-Prep.com/GMAT

    Free Online Trial Hour:
    http://www.optimus-prep.com/request-free-online-trial-hour/

    Free GMAT Study Plan:
    http://www.optimus-prep.com/ebook/

    Optimus Prep™ Rates:
    GMAT Private Tutoring Online: $80-100/hr.*
    GMAT Private Tutoring In-Person: $130-150/hr.*
    GMAT On Demand Course: $299 (Use Discount Code BEATTHEGMAT111)*

    *All GMAT Courses Have A 50 Points Score Improvement Or Full Refund Guarantee

    Best Conversation Starters

    1 Vincen 132 topics
    2 lheiannie07 65 topics
    3 LUANDATO 54 topics
    4 Roland2rule 43 topics
    5 ardz24 40 topics
    See More Top Beat The GMAT Members...

    Most Active Experts

    1 image description Brent@GMATPrepNow

    GMAT Prep Now Teacher

    133 posts
    2 image description GMATGuruNY

    The Princeton Review Teacher

    114 posts
    3 image description EconomistGMATTutor

    The Economist GMAT Tutor

    113 posts
    4 image description Rich.C@EMPOWERgma...

    EMPOWERgmat

    109 posts
    5 image description DavidG@VeritasPrep

    Veritas Prep

    72 posts
    See More Top Beat The GMAT Experts