automobile manufacturer

vijaynaik wrote:

ssp wrote:

FightWithGMAT wrote:

ssgmatter wrote:
IMO D
D looks good.

A manufacturer supplies 1000 cars to a dealer in a month and earns 10% on each car. During the incentive program, it supplies 1000 cars in just a week and earns only 3% on each car. All the 1000 cars do not get consumed by consumers. Dealer stores 800 cars and sells after the incentive program is over. He can sell the car at normal price and earn more profit.

This situation is weird for manufacturer even through they sold more cars in a week they earned very less profit on these cars. They could have earned a normal profit by selling the cars normally.

Your analysis in the two lines above actually is exactly why you would NOT Want to choose D. I think you are blurring the lines between the reseller and the manufacturer. The stimulus is centered around the manufacturer and NOT the reseller. EXACTLY - "They could have earned a normal profit by selling the cars normally." Why did they not just sell the cars normally? Because they had to maintain competitive pricing with their competitors. If they did not do this, they might lose consumers which would be bad in the long run.

Question is about the cars sold to dealers as part of the incentive program not to the consumers. So competition with other manufacturers is out of scope. We should look within the incentive program to the dealers and see how this could result in less profit for the manufacturer?
D answers that.

The question asks you to SUPPORT the argument FOR the incentive programs. D does not support the argument FOR incentive programs. It actually weakens the argument suggesting that dealers purposefully purchase additional inventory to resell at a higher price later on. You want to say that despite the lower margin that the manufacturer gets when it offers the discount, there is something ELSE that makes the incentive program worthwhile.

ssp wrote:

vijaynaik wrote:

ssp wrote:

FightWithGMAT wrote:

ssgmatter wrote:
IMO D
D looks good.

A manufacturer supplies 1000 cars to a dealer in a month and earns 10% on each car. During the incentive program, it supplies 1000 cars in just a week and earns only 3% on each car. All the 1000 cars do not get consumed by consumers. Dealer stores 800 cars and sells after the incentive program is over. He can sell the car at normal price and earn more profit.

This situation is weird for manufacturer even through they sold more cars in a week they earned very less profit on these cars. They could have earned a normal profit by selling the cars normally.

Your analysis in the two lines above actually is exactly why you would NOT Want to choose D. I think you are blurring the lines between the reseller and the manufacturer. The stimulus is centered around the manufacturer and NOT the reseller. EXACTLY - "They could have earned a normal profit by selling the cars normally." Why did they not just sell the cars normally? Because they had to maintain competitive pricing with their competitors. If they did not do this, they might lose consumers which would be bad in the long run.

Question is about the cars sold to dealers as part of the incentive program not to the consumers. So competition with other manufacturers is out of scope. We should look within the incentive program to the dealers and see how this could result in less profit for the manufacturer?
D answers that.

The question asks you to SUPPORT the argument FOR the incentive programs. D does not support the argument FOR incentive programs. It actually weakens the argument suggesting that dealers purposefully purchase additional inventory to resell at a higher price later on. You want to say that despite the lower margin that the manufacturer gets when it offers the discount, there is something ELSE that makes the incentive program worthwhile.

Actually D supports the argument. Because the argument is 'Such incentive programs often result in a dramatic increase in the amount of product sold by the automobile manufacturers to dealers but may hurt the manufacturers' profitability'. This arguments says manufacturer may be hurt by the incentive program. And the question asks us to support this. How can we support it so that the argument becomes stronger and confirms that the incentive program really hurts the manufacturer? Only D makes it stronger.

ssgmatter wrote:Automobile manufacturers often offer incentive programs through which they discount the price of a car to their dealers for a promotion period when the product is advertised to consumers. Such incentive programs often result in a dramatic increase in the amount of product sold by the automobile manufacturers to dealers but may hurt the manufacturers' profitability. Which of the following, if true, most strongly supports an argument for the incentive programs?
A. The amount of discount generally offered by manufacturers to dealers is carefully calculated to represent the minimum needed to draw consumers' attention to the product.
B. For many consumer products, the period of advertising discounted prices to consumers is about a week, which is not sufficiently long for consumers to become used to the sale price.
C. More prestigious auto makers do not use incentive programs because they dilute the company's brand name.
D. During such a promotion, retailers tend to accumulate in their warehouses inventory bought at discount; they then sell much of it later at their regular price.
E. If a manufacturer fails to offer such promotions but its competitor offers them, that competitor will tend to attract consumers away from the manufacturer's product.

diebeatsthegmat wrote:

ssgmatter wrote:Automobile manufacturers often offer incentive programs through which they discount the price of a car to their dealers for a promotion period when the product is advertised to consumers. Such incentive programs often result in a dramatic increase in the amount of product sold by the automobile manufacturers to dealers but may hurt the manufacturers' profitability. Which of the following, if true, most strongly supports an argument for the incentive programs?
A. The amount of discount generally offered by manufacturers to dealers is carefully calculated to represent the minimum needed to draw consumers' attention to the product.
B. For many consumer products, the period of advertising discounted prices to consumers is about a week, which is not sufficiently long for consumers to become used to the sale price.
C. More prestigious auto makers do not use incentive programs because they dilute the company's brand name.
D. During such a promotion, retailers tend to accumulate in their warehouses inventory bought at discount; they then sell much of it later at their regular price.
E. If a manufacturer fails to offer such promotions but its competitor offers them, that competitor will tend to attract consumers away from the manufacturer's product.

this question is kinda like the argument in OG 11 which talks about selling weapon ...blah blah i dont remember clearly the content but there's a choice saying that " if usa doesnt sell weapons, another countries will ( just to get profit)