MGMAT CAT 4----earthquakes in mine

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MGMAT CAT 4----earthquakes in mine

by prachich1987 » Sun Jan 16, 2011 3:15 am
Two years ago, the cost of the raw material used in a particular product doubled after an earthquake disrupted production in the region where the material is mined. Since that time, the company that makes the product has seen its profit margins decline steadily. Aiming to improve profit margins, the company's head of engineering has decided that he must find a new source for the raw material.

Which of the following, if true, would cast the most doubt on the validity of the head of engineering's decision?

A) New competitors have entered the market every six months for the past two years, resulting in price wars that have progressively driven down revenues across the market.

B) Although the earthquake occurred two years ago, the region's mines have still not recovered to pre-earthquake production capacity.

C) There are several other regions in the world where the raw material is mined, but those regions do not produce as much of the raw material as the current source region.

D) The company could use a completely different raw material to make its product.

E) Earthquakes are common in the region where the material is mined, which tends to have an earthquake once every 5 years, on average.

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by AIM GMAT » Sun Jan 16, 2011 3:35 am
IMO A .

To improve the profit margin a paticular step is being taken , any answer choice that will tell us that less profit is not due rising cost of raw material but due to some other XYZ reason .

A] Nailed the argument by giving other reason for less profit , hence cast a serious doubt on the strategy of company ghead to increase profit.

B] Irrelevent

C] Irrelevant , this is next step after agreeying to company head , so not in scope of our argument.

D] This provides us with option of using other raw material . Close , but not valid if the reson of less profit is some other, hence eliminated.

E] Irrelevant.

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by prachich1987 » Sun Jan 16, 2011 8:24 am
The OA is A