doubt CR 4

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doubt CR 4

by aditya8062 » Sun Oct 19, 2014 10:04 pm
Algorpal Industries produces high quality pneumatic filters. For years, they have primarily served manufacturers of domestic agricultural equipment, and over time, this market has been decreasing. A consultant recommended that, with a minor modification, Algorpal could expand into pneumatic filters for biomedical research technology, a rapidly expanding market. The consultant argued that this single change could reverse a ten-year decline in Algorpal's profits.

Which of the following would be the most useful to establish in evaluating the consultant's recommendation?

A Whether other markets, such as food processing and food service, would offer greater opportunities for potential profits.

B Whether the number of biomedical devices at any single research center is greater than the number of pieces of equipment requiring filters on a single farm.

C How the ambient indoor air quality in a biomedical research center compares to the typical outdoor air quality in an agricultural zone.

D Whether the competition in the biomedical technology sector would allow for profits similar to what those in the agricultural sector had been

E Whether countries with expanding agricultural sectors would use farm equipment similarly to the domestic equipment current served by Algorpal.

my concern: if i evaluate option E then there is a reasonable ground to believe that the market of "domestic agricultural equipment" does exist and hence there is NO NEED for this company to change its original product. will this reasoning be incorrect?

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by [email protected] » Sun Oct 19, 2014 10:25 pm
Hi aditya8062,

This is an example of an Evaluation prompt, which is relative rare on Test Day (you'll probably see 1).

Since the prompt asks us to focus on the CONSULTANT'S recommendation, we need to understand the Consultant's logic (so that we can evaluate it and the answer choices).

The Consultant offers advice that could reverse a 10-year decline in PROFITABILITY for Algorpal. The advice is about converting pneumatic filters from primarily domestic agriculture use so that they can also serve biomedical research use. With the new market (which is also expanding), Algorpal can make back whatever decreasing profits are lost from the agricultural market (which is decreasing). The issue begins and ends with profitability in those 2 industries, so we need an answer that focuses on THAT issue.

The only answer that matches the Consultant's point is Answer D

Answer E does NOT address the argument that the Consultant made, so it is not a logical way to evaluate what the Consultant advised.

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by aditya8062 » Sun Oct 19, 2014 11:12 pm
Since the prompt asks us to focus on the CONSULTANT'S recommendation, we need to understand the Consultant's logic
My argument was little different
The situation in front of us is as follows: there is a company whose profit is declining because its market is shrinking. To solve this MR A tell to make some changes in the original product. Now the point is what if MR B tells that there is NO NEED to change the product because there is "Booming market"for the "original product" which MR A has not considered !!

one OG question was based on similar premise in which the answer was based on reasoning which i am trying to point out

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by GMATGuruNY » Mon Oct 20, 2014 4:23 am
aditya8062 wrote:
Since the prompt asks us to focus on the CONSULTANT'S recommendation, we need to understand the Consultant's logic
My argument was little different
The situation in front of us is as follows: there is a company whose profit is declining because its market is shrinking. To solve this MR A tell to make some changes in the original product. Now the point is what if MR B tells that there is NO NEED to change the product because there is "Booming market"for the "original product" which MR A has not considered !!

one OG question was based on similar premise in which the answer was based on reasoning which i am trying to point out
Answer choice E, rephrased as a statement:
Countries with expanding agricultural sectors would use farm equipment similarly to the domestic equipment currently served by Algorpal.
Answer choice E suggests an alternate way that Algorpal might be able to increase profits.
But the consultant's conclusion is very limited in scope.
He does NOT conclude that expanding into biomedical research is the BEST way for Algorpal to increase profits.
He concludes only that expanding into biomedical research is ONE way for Algorpal to increase profits.
Answer choice E does not help us determine whether Algorpal could increase profits by expanding into biomedical research.
Let's say that foreign agricultural markets could increase profits by 1000%.
How does this information help us determine whether EXPANDING INTO BIOMEDICAL RESEARCH could increase profits?

Please cite the CR in the OG so that we can compare its line of reasoning to that in the CR above.
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by aditya8062 » Mon Oct 20, 2014 4:44 am
Thanks Guru for your reply
Please cite the CR in the OG so that we can compare its line of reasoning to that in the CR above.
i have been trying to find that question myself. i remember that the premise of that question was also discussing an alternate market for the product and then the "evaluation" was done on the basis whether there is any possibility of existing market for the "original product". i will definitely put that question here once i get it.

Answer choice E does not help us determine whether Algorpal could increase profits by expanding into biomedical research.


i feel that the argument is asking us to evaluate the consultant's recommendation and NOT evaluate the SUCCESS of HIS PLAN

The "the consultant's recommendation" is to bring a "change in product". what if "bringing that change" is really NOT REQUIRED? WHAT IF there is a market(FOR ORIGINAL PRODUCT) which the company is totally unaware of and which might have come in the notice of this company just when it was about to bring the change in its product?

is my logic really wrong?

suppose if we consider this argument in a real life situation and a specific company is pondering to bring a change in its product (because its domestic market has reduced) then wont it be prudent on the part of the company to fist conduct a survey to check whether there is "any market" left for its original product? i agree that "domestic market" can get reduced for any product but then if such a "juncture" comes in any product's life (which i am sure comes in almost every product's life cycle) THEN the first step that company must take is to find out whether there is "any international" market for its product, after all this is what globalization is all about

HAD the argument been about the "evaluation" of the success of the plan recommended by the analyst then D would have been a perfect fit BUT the question stem is asking to "evaluate" the "recommendation"

kindly guide