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himu: Master | Next Rank: 500 Posts; Posts: 345; Joined: Sun Dec 21, 2008 10:57 pmFollowed by: 3 members; Thanked: 6 times

by himu » Sat Sep 22, 2012 10:07 pm

Because of rising costs, United Shipping Company raised its rates by
ten percent last year. Many of its customers balked at the increase,
however, and turned to a rival company whose rates were lower. In
response, United Shipping Company began offering a package of services
for a single rate that, though high, is still lower than the combined
rates of the individual services. Officers of the company claim that
this move will recoup the company's lost profits.

Which of the following, if true, provides the best basis for the
officers' claim?

United Shipping will aggressively advertise the new package of services.

United Shipping's rival does not offer some of the services included
in the package.

Marketing studies have shown that many of United Shipping's former
customers would prefer a combined rate for their various shipping
services.

United Shipping does not already offer all the services separately.

No other shipping company offers the same package of services as
United Shipping.

Source: Beat The GMAT — Critical Reasoning | Sat Sep 22, 2012 10:07 pm

ananthrajavadhuta: Junior | Next Rank: 30 Posts; Posts: 14; Joined: Wed Jan 12, 2011 9:45 amFollowed by: 2 members

by ananthrajavadhuta » Sat Sep 22, 2012 10:23 pm

C

OA Please.

shekhar.kataria: Master | Next Rank: 500 Posts; Posts: 268; Joined: Mon Mar 15, 2010 12:10 am; Thanked: 13 times

by shekhar.kataria » Sun Sep 23, 2012 10:16 am

IMO C.

If its correct, i will give explanations but first OA please.

Restlessness and discontent are the first necessities of progress.--Thomas A. Edison

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umeshpatil: Senior | Next Rank: 100 Posts; Posts: 79; Joined: Wed May 23, 2012 7:23 pm; Thanked: 10 times

by umeshpatil » Tue Sep 25, 2012 7:33 pm

A. Out of context.
B. We knew, Rival is already offering part of package with low price. No.
C. Assumed, that old customer like the combined rates and services. but, If these services are also offered by rival, then customer will not come back. No
D. Out of scope.
E. It it is true and as said with low cost, then customer are ours.

IMO:E.

henryjejo: Senior | Next Rank: 100 Posts; Posts: 58; Joined: Tue Jul 29, 2008 11:12 pm; Thanked: 7 times

by henryjejo » Tue Sep 25, 2012 11:06 pm

The issue is that the combined service will recoup profits. We need some evidence that combined service will work for the customers, yielding profit to the company.

a) United Shipping will aggressively advertise the new package of services. - Marketing may lead to sales...but there is an "iffy-ness" about the sales/profit.

United Shipping's rival does not offer some of the services included in the package. - Nothing about profit

Marketing studies have shown that many of United Shipping's former customers would prefer a combined rate for their various shipping services. - Correct. If the customers prefer a combined rate, then its possible that firm will recoup profits and the customers.

United Shipping does not already offer all the services separately. - Even it offers all the services separately, the customer do not want it. Its 10% higher!

No other shipping company offers the same package of services as United Shipping. - It does not matter whether other companies offer. Are customers attracted to this service?

Regards
HenryJEJO

ashg84: Senior | Next Rank: 100 Posts; Posts: 48; Joined: Sat Jul 09, 2011 9:42 am

by ashg84 » Tue Sep 25, 2012 11:16 pm

umeshpatil wrote:A. Out of context.
B. We knew, Rival is already offering part of package with low price. No.
C. Assumed, that old customer like the combined rates and services. but, If these services are also offered by rival, then customer will not come back. No
D. Out of scope.
E. It it is true and as said with low cost, then customer are ours.

IMO:E.

IMO - C
Choice C does not assume that old customer like the combined rates and service. In fact this statement stating that old customer like combines services and hence the move by the shipping compay will help them to win back there customer as the combined rates of all service will be lower than that provided by other rival company. Yes argument does assume that rival companies does not offer similar combanied service packages. But i guess this is a valid assumption.

Choice E is wrong is it does not support the argument. There is possibility that inspite of the fact that rival companies also offer similar packages, there prices are higher.

himu: Master | Next Rank: 500 Posts; Posts: 345; Joined: Sun Dec 21, 2008 10:57 pmFollowed by: 3 members; Thanked: 6 times

by himu » Thu Sep 27, 2012 8:29 pm

Yes The correct ans is C
Thanks so much for your valuable explanations !
Please ans the next one ?
Cheers,
~Himu.

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