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New computer chip

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by komal » Mon Feb 08, 2010 7:18 pm
The Plexis Corporation, a leading computer chip manufacturer, is currently developing a new chip, which is
faster and more efficient than any computer chip currently in use. The new chip will be released for sale in
twelve months. Plexis' market research has shown that initial sales of the new chip would be maximized by
starting to advertise it now, but the company has decided to wait another six months before doing so.
Which of the following, if true, provides the Plexis Corporation with the best reason for postponing advertising
its new chip?

(A) Some computer users are reluctant to purchase new computer products when they are first released.

(8) The cost of an advertising campaign capable of maximizing initial sales of the new chip would be no
greater than campaigns previously undertaken by Plexis.

(C) Advertising the new chip now will significantly decrease sales of Plexis' current line of computer chips.

(D) Plexis' major rivals in the computer chip manufacturing business are developing a chip with capabilities
that are comparable to those of Plexis' new chip.

(E) Taking full advantage of the capacities of the new chip will require substantial adjustments in other
segments of the computer industry.

OA C
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by fibbonnaci » Mon Feb 08, 2010 7:29 pm
what is the conclusion- plexis delyaed its initial release by 6 months
how can we support this decision?

(A) Some computer users are reluctant to purchase new computer products when they are first released. [this would hold true after 6 months too. Eliminated!]

(8) The cost of an advertising campaign capable of maximizing initial sales of the new chip would be no
greater than campaigns previously undertaken by Plexis. [cost is not greater, but does that mean they can release after 6 months and not today?hw will cost be different today? Eliminated]

(C) Advertising the new chip now will significantly decrease sales of Plexis' current line of computer chips. [hits the bulls eye! it says why the company postpopned its release. Correct!]

(D) Plexis' major rivals in the computer chip manufacturing business are developing a chip with capabilities
that are comparable to those of Plexis' new chip. [if the rivals are developing something, plexis must be interested to release it as early as possible. this is a weakening statement. Eliminated!]

(E) Taking full advantage of the capacities of the new chip will require substantial adjustments in other
segments of the computer industry. [completely irrelevant. does not focus on plexis but on computer industry in general]

Hope this helps!
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by kushagra452 » Sun Sep 26, 2010 10:07 pm
Shouldn't we consider choice E as well? I was confused between C and E. I interpreted choice E as follows: to take full advantage of the new chip will require adjustments in the computer industry it will be better to delay the launch of the chip by six months so that these changes are incorporated before the official launch of the chip.

Any thoughts on this ??
Thanks
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by arpita@gurome » Mon Sep 27, 2010 5:31 am
@kushagra452

fibbonnaci has done a great job of eliminating answers, I fully concur with them. Since the confusion exists between C and E, I will elaborate on these.

C - The mere fact that if Plexis advertises the new chip it will harm existing chip sales "stands" on its own. Does not need any action from anyone to do anything to explain the reason of delay.

E - The industry has to change and change in six months. Who is going to change it? What if Plexis does try to change the industry and it will actually take 2 years then this decision is still not justified. Hence there are many holes in this answer choice.

[spoiler]Hence we pick C[/spoiler]

Hope this helps!
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by abhichhajer » Thu Feb 23, 2012 9:58 am
I am still not convinced with C.
Fact: Chip will hit the market in 12 months.
Whether Plexis advertise it currently or after 6 months, sales of its current line of chip would be affected.
Any thoughts would be much appreciated.

arpita@gurome wrote:@kushagra452

fibbonnaci has done a great job of eliminating answers, I fully concur with them. Since the confusion exists between C and E, I will elaborate on these.

C - The mere fact that if Plexis advertises the new chip it will harm existing chip sales "stands" on its own. Does not need any action from anyone to do anything to explain the reason of delay.

E - The industry has to change and change in six months. Who is going to change it? What if Plexis does try to change the industry and it will actually take 2 years then this decision is still not justified. Hence there are many holes in this answer choice.

[spoiler]Hence we pick C[/spoiler]

Hope this helps!
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by GmatKiss » Sat Feb 25, 2012 6:32 am
A straight C
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by abhichhajer » Sun Feb 26, 2012 9:06 pm
GmatKiss wrote:A straight C
Whether it is 6 months or 12 months...the sale of current product line would be affected
So why C?
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by agarwalmanoj2000 » Sun Feb 26, 2012 10:31 pm
Whether it is 6 months or 12 months...the sale of current product line would be affected
So why C?
Plexis Corporation may have current line of product's stock to meet the sale of coming 6-9 months, so to minimize its loss it is postponing advertisement for 6 months.
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