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BTG practice question - Coffee Shop Owner: One of our shopâ€

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BTG practice question - Coffee Shop Owner: One of our shopâ€

by vinni.k » Mon Nov 14, 2011 10:47 am
Source: BTG practice question

Coffee Shop Owner: One of our shop's greatest expenses is having our beans roasted by an outside service. If we set up our own roasting operation, we can roast our own beans, thus eliminating this expense. Since reducing expenses is the easiest way to increase profitability, I will begin setting up a roasting operation.

The coffee shop owner's argument assumes which of the following?

A. Roasting beans in-house will result in fresher, better-tasting coffee.
B. It will be easy to train the shop's employees to operate the roasting equipment.
C. The shop will be able to increase profits by providing a roasting service to other coffee shops.
D. Roasting equipment and space are inexpensive and readily available.
E. The long-term cost of continuing to use the outside roasting service exceeds that of setting up and running a roasting operation.

Answer is E

What is wrong with choice D.

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by Brent@GMATPrepNow » Mon Nov 14, 2011 11:04 am
vinni.k wrote:Source: BTG practice question

Coffee Shop Owner: One of our shop's greatest expenses is having our beans roasted by an outside service. If we set up our own roasting operation, we can roast our own beans, thus eliminating this expense. Since reducing expenses is the easiest way to increase profitability, I will begin setting up a roasting operation.

The coffee shop owner's argument assumes which of the following?

A. Roasting beans in-house will result in fresher, better-tasting coffee.
B. It will be easy to train the shop's employees to operate the roasting equipment.
C. The shop will be able to increase profits by providing a roasting service to other coffee shops.
D. Roasting equipment and space are inexpensive and readily available.
E. The long-term cost of continuing to use the outside roasting service exceeds that of setting up and running a roasting operation.

Answer is E

What is wrong with choice D.

Thanks & Regards
Vinni
D. It may be true that roasting equipment and space are inexpensive and readily available, but if it's even cheaper to have the outside service roast the beans, the owner will not increase profits be roasting the beans himself/herself.

The best way to see why E is the best answer, is to apply The Negation Technique.

When we negate E, we get... The long-term cost of continuing to use the outside roasting service does not exceed that of setting up and running a roasting operation.
In other words, it's cheaper to get the beans roasted elsewhere than for the owner to roast them.
So, if the owner roasts his/her beans, he/she will actually decrease profits.
Since this negated assumption destroys the argument, the answer must be E.

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Brent
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by vinni.k » Mon Nov 14, 2011 11:34 am
Brent@GMATPrepNow wrote:
D. It may be true that roasting equipment and space are inexpensive and readily available, but if it's even cheaper to have the outside service roast the beans, the owner will not increase profits be roasting the beans himself/herself.

The best way to see why E is the best answer, is to apply The Negation Technique.

When we negate E, we get... The long-term cost of continuing to use the outside roasting service does not exceed that of setting up and running a roasting operation.
In other words, it's cheaper to get the beans roasted elsewhere than for the owner to roast them.
So, if the owner roasts his/her beans, he/she will actually decrease profits.
Since this negated assumption destroys the argument, the answer must be E.

Cheers,
Brent
Thanks Brent.

Can you please elaborate more on D. What if i use the same negation technique on D. I mean to say, If roasting equipment and space are expensive and readily available, then there is no point of profitability. This also destroys the argument. Can please throw some more light on D.

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by Brent@GMATPrepNow » Mon Nov 14, 2011 11:42 am
vinni.k wrote:
Brent@GMATPrepNow wrote:
D. It may be true that roasting equipment and space are inexpensive and readily available, but if it's even cheaper to have the outside service roast the beans, the owner will not increase profits be roasting the beans himself/herself.

The best way to see why E is the best answer, is to apply The Negation Technique.

When we negate E, we get... The long-term cost of continuing to use the outside roasting service does not exceed that of setting up and running a roasting operation.
In other words, it's cheaper to get the beans roasted elsewhere than for the owner to roast them.
So, if the owner roasts his/her beans, he/she will actually decrease profits.
Since this negated assumption destroys the argument, the answer must be E.

Cheers,
Brent
Thanks Brent.

Can you please elaborate more on D. What if i use the same negation technique on D. I mean to say, If roasting equipment and space are expensive and readily available, then there is no point of profitability. This also destroys the argument. Can please throw some more light on D.

Vinni
If we negate D, we get: Roasting equipment and space are expensive and not readily available.

Does this destroy the argument that it would be more profitable for the owner to roast her own beans?
Maybe (the key word here is maybe). If it were more expensivefor the owner to roast her own beans, then this would destroy the argument.
However, negating D does not say that it's more expensive for for the owner to roast her own beans. It just says that it's expensive for the owner to roast her own beans.
What if it's super, duper, crazy expensive to have an outside service roast the beans?
If this were the case, then it would still be more profitable for the owner to roast her own beans.
So, negating answer choice D does not necessarily destroy the argument.

Answer choice E, however, does destroy the argument.

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Brent
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by vinni.k » Mon Nov 14, 2011 12:34 pm
Brent@GMATPrepNow wrote:
However, negating D does not say that it's more expensive for for the owner to roast her own beans. It just says that it's expensive for the owner to roast her own beans.
Hmmm, Well didn't have an idea that these small things do matter a lot.

Then in case of (E), besides negation technique that destroys the argument, the word "exceeds" also plays a role to determine that outside service can decrease profit in comparison to in house service. ?

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by tuanquang269 » Mon Nov 14, 2011 4:40 pm
D. Roasting equipment and space are inexpensive and readily available.

D is wrong because it does not really link to the scope of argument directly (profit).

Some of assumption I thought before reading answer choices including: profit of own roasting system is comparable with outside roasting system, the ability of company to buy the roasting equipment....

However, in D, we negate it, it will become: "RE and space are expensive and not readily available". Company still can purchase it although it readily, right? Moreover, it can buy expensive RE, but they can exclude high cost for long term.

Hope that help.
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by vinni.k » Tue Nov 15, 2011 10:43 am
Thanks tuanquang269
tuanquang269 wrote:D. Roasting equipment and space are inexpensive and readily available.

D is wrong because it does not really link to the scope of argument directly (profit).

Some of assumption I thought before reading answer choices including: profit of own roasting system is comparable with outside roasting system, the ability of company to buy the roasting equipment....

However, in D, we negate it, it will become: "RE and space are expensive and not readily available". Company still can purchase it although it readily, right? Moreover, it can buy expensive RE, but they can exclude high cost for long term.

Hope that help.
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