a very good assumption CR... please try frm GMAT prep...

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In order to save money, some of Company X's manufacturing plants converted from oil fuel to natural gas last year, when the cost of oil was more than the cost of natural gas. Because of a sudden, unexpected shortage, however, natural gas now costs more than oil, the price of which has fallen steeply over the past year. The cost of conversion
back to oil would more than negate any cost savings in fuel. So Company X's fuel costs this year will be significantly higher than they were last year.

Which of the following is an assumption on which the argument above depends?

A] Company X does not have money set aside for the increased costs of fuel.

B] The increase in the cost of fuel cannot be offset by reductions in other operating expenses.

C] The price of natural gas will never again fall below that of oil.

D] The cost of fuel needed by those of Company X's plants that converted to natural gas is not less than the cost of fuel needed by those plants still using oil.

E] The price of oil will not experience a sudden and steep increase.


The OA is D.

Caught up between options B and D. The reality is that i got the inclination to go for the option D and am still trying to understand the option D.

Could any of you please give precise calculations and help understand this question in a more concise way...

Thank you for your helpp...
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by [email protected] » Tue Mar 06, 2012 10:37 pm
The cost of fuel needed by those of Company X's plants that converted to natural gas is not less than the cost of fuel needed by those plants still using oil.




What I see in the option D is that:

the underlined portion should have been replaced by the conversion costs from natural gas to oil back again. That will make the argument concise and will support the conclusion as 'significant price increase.'

This underlined portion resembles the total cost for the year for the departments that converted from oil to natural gas last year...;
What say guyyyyzzzzzzz....
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by killer1387 » Wed Mar 07, 2012 1:53 am
In order to save money, some of Company X's manufacturing plants converted from oil fuel to natural gas last year, when the cost of oil was more than the cost of natural gas. Because of a sudden, unexpected shortage, however, natural gas now costs more than oil, the price of which has fallen steeply over the past year. The cost of conversion
back to oil would more than negate any cost savings in fuel. So Company X's fuel costs this year will be significantly higher than they were last year.

Which of the following is an assumption on which the argument above depends?

A] Company X does not have money set aside for the increased costs of fuel.
--> irrelevant

B] The increase in the cost of fuel cannot be offset by reductions in other operating expenses.
--> we dont have information about other X's plants that still uses oil.

C] The price of natural gas will never again fall below that of oil.
--> irrelevant

D] The cost of fuel needed by those of Company X's plants that converted to natural gas is not less than the cost of fuel needed by those plants still using oil.
--> By POE, this only remians

E] The price of oil will not experience a sudden and steep increase.
--> this doesnt have any impact on conclusion that is for this year in particular.


Mathematically,


conclusion:- "Company X's fuel costs this year will be significantly higher than they were last year."

company's fuel cost (F)= Total fuel cost of x's plant still with oil (O)+ Total fuel cost of x's plant with natural gas(N).

Suppose, last year --> oil cost=100
natural gas=90
this year-> oil=70
natural= 90
(Because of a sudden, unexpected shortage, however, natural gas now costs more than oil, the price of which has fallen steeply over the past year)

Now, let O>N (opposite of option D)

SAY total manufacturing plants be 10)

suppose 4 plants converted i.e. 6*70>4*90=> 420>360
hence F= 420+360=780 (max fuel cost than any combination when O> N)

now last year when all was oil= 100* 10=1000

hence if O> N then no way fuel cost this year would go higher than last year .

hence O<=N for fuel cost to go higher than last year.
hence option D

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by killer1387 » Wed Mar 07, 2012 1:59 am
[email protected] wrote:The cost of fuel needed by those of Company X's plants that converted to natural gas is not less than the cost of fuel needed by those plants still using oil.

What I see in the option D is that:

the underlined portion should have been replaced by the conversion costs from natural gas to oil back again. That will make the argument concise and will support the conclusion as 'significant price increase.'

This underlined portion resembles the total cost for the year for the departments that converted from oil to natural gas last year...;
What say guyyyyzzzzzzz....
no its gud conclusion talks about "Company X's fuel costs" and hence "cost of fuel of X's plants" properly goes with the "fuel cost of X".

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by GMATGuruNY » Wed Mar 07, 2012 4:45 am
[email protected] wrote:In order to save money, some of Company X's manufacturing plants converted from oil fuel to natural gas last year, when the cost of oil was more than the cost of natural gas. Because of a sudden, unexpected shortage, however, natural gas now costs more than oil, the price of which has fallen steeply over the past year. The cost of conversion
back to oil would more than negate any cost savings in fuel. So Company X's fuel costs this year will be significantly higher than they were last year.

Which of the following is an assumption on which the argument above depends?

A] Company X does not have money set aside for the increased costs of fuel.

B] The increase in the cost of fuel cannot be offset by reductions in other operating expenses.

C] The price of natural gas will never again fall below that of oil.

D] The cost of fuel needed by those of Company X's plants that converted to natural gas is not less than the cost of fuel needed by those plants still using oil.

E] The price of oil will not experience a sudden and steep increase.


The OA is D.

Caught up between options B and D. The reality is that i got the inclination to go for the option D and am still trying to understand the option D.

Could any of you please give precise calculations and help understand this question in a more concise way...

Thank you for your helpp...
Answer choice D, negated: The cost of fuel needed by those of Company X's plants that converted to natural gas is LESS than the cost of fuel needed by those plants still using oil -- the price of which has FALLEN STEEPLY.
If the negation of D is true, then the conclusion that fuel costs will increase is invalidated: since the price of oil has FALLEN STEEPLY, and the cost of fuel for the plants that use gas is LESS than the cost of fuel for the plants that use oil, overall fuel costs will be LOWER. Thus, D is the necessary assumption: WHAT MUST BE TRUE in order for the conclusion to be valid.

The correct answer is D.

Answer choice B: The increase in the cost of fuel cannot be offset by reductions in other operating expenses.
This answer choice is outside the scope. The conclusion is not about overall expenses but only about FUEL COSTS. Reducing OTHER expenses has no effect on FUEL COSTS.
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by [email protected] » Sat Mar 10, 2012 3:38 am
Yes my opinion was correct. The wording in the option D was absolutely wrong. In order for the conclusion to be valid i.e significant increase in the cost, the comparison of the total fuel costs is wrongly worded. It should be that the conversion costs need not be less than the total fuel costs of the departments that did not convert from oil to natural gas initially...

https://www.manhattangmat.com/forums/cri ... t1841.html

See this link and see why am I wrong. This is a Manhattan Gmat question.
The conclusion states significant increase and not just increase or less than...

These small words really matter on the GMAT...

Hope this explanation really helps...
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by [email protected] » Sat Mar 10, 2012 3:39 am
Yes my opinion was correct. The wording in the option D was absolutely wrong. In order for the conclusion to be valid i.e significant increase in the cost, the comparison of the total fuel costs is wrongly worded. It should be that the conversion costs need not be less than the total fuel costs of the departments that did not convert from oil to natural gas initially...

https://www.manhattangmat.com/forums/cri ... t1841.html

See this link and see why am I wrong. This is a Manhattan Gmat question.
The conclusion states significant increase and not just increase or less than...

These small words really matter on the GMAT...

Hope this explanation really helps...
IT IS TIME TO BEAT THE GMAT

LEARNING, APPLICATION AND TIMING IS THE FACT OF GMAT AND LIFE AS WELL... KEEP PLAYING!!!

Whenever you feel that my post really helped you to learn something new, please press on the 'THANK' button.