Algorpal Industries produces high quality pneumatic filters. For years, they have primarily served manufacturers of domestic agricultural equipment, and over time, this market has been decreasing. A consultant recommended that, with a minor modification, Algorpal could expand into pneumatic filters for biomedical research technology, a rapidly expanding market. The consultant argued that this single change could reverse a ten-year decline in Algorpal's profits.
Which of the following would be the most useful to establish in evaluating the consultant's recommendation?
A. Whether other markets, such as food processing and food service, would offer greater opportunities for potential profits.
B. Whether the number of biomedical devices at any single research center is greater than the number of pieces of equipment requiring filters on a single farm.
C. How the ambient indoor air quality in a biomedical research center compares to the typical outdoor air quality in an agricultural zone.
D. Whether the competition in the biomedical technology sector would allow for profits similar to what those in the agricultural sector had been
E. Whether countries with expanding agricultural sectors would use farm equipment similarly to the domestic equipment current served by Algorpal.
OA D
Source: Magoosh
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Algorpal Industries produces high quality pneumatic filters.
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Let's follow the options available one after the other in a bid to sorting out the most correct of all.
Option A - INCORRECT.
It is known fact that agricultural equipment are used relative to food production and allied services. There would exist a proportional increase or decrease in the profits gained in the production of equipment by Algorpal industries if the food produced out there gains more in profit too, otherwise, there would be a decrease. Since ''the market has been decreasing'' then the opportunities in the food sector must corresponding decrease too.
Option B - INCORRECT.
Since it's been said that the Bio-medical market is rapidly expanding then it means one unit of such devices cost a handful more than filter equipment on the farm sites. By percentage, it's possible a unit of Bio-medical equipment would cost more than 5 farm's.
Option C - INCORRECT.
Since the consultant has recommended to the industries to embark on manufacturing bio-medical equipment it must certainly be noted that minor modifications would need to be carried out on their production plant to enable it switch to the production of bio-wares.
Option D - CORRECT.
Here, it must have been explained and appropriate justified that the new investment climate of Bio-medical manufacturing would bring more gains even with competitions that what obtained in the agricultural sector. Since, the market is currently expanding it means it would accommodate as much as ''presently'' available in order to meet consumers' demands.
Option E - INCORRECT.
That would be speculative because different countries with different areas of unique specialization in equipment production and marketing. A country with booming agricultural sector would use bigger and more sophisticated equipment to quicken their activities which would be bigger than what Algorpal can manufacture.
Option A - INCORRECT.
It is known fact that agricultural equipment are used relative to food production and allied services. There would exist a proportional increase or decrease in the profits gained in the production of equipment by Algorpal industries if the food produced out there gains more in profit too, otherwise, there would be a decrease. Since ''the market has been decreasing'' then the opportunities in the food sector must corresponding decrease too.
Option B - INCORRECT.
Since it's been said that the Bio-medical market is rapidly expanding then it means one unit of such devices cost a handful more than filter equipment on the farm sites. By percentage, it's possible a unit of Bio-medical equipment would cost more than 5 farm's.
Option C - INCORRECT.
Since the consultant has recommended to the industries to embark on manufacturing bio-medical equipment it must certainly be noted that minor modifications would need to be carried out on their production plant to enable it switch to the production of bio-wares.
Option D - CORRECT.
Here, it must have been explained and appropriate justified that the new investment climate of Bio-medical manufacturing would bring more gains even with competitions that what obtained in the agricultural sector. Since, the market is currently expanding it means it would accommodate as much as ''presently'' available in order to meet consumers' demands.
Option E - INCORRECT.
That would be speculative because different countries with different areas of unique specialization in equipment production and marketing. A country with booming agricultural sector would use bigger and more sophisticated equipment to quicken their activities which would be bigger than what Algorpal can manufacture.
