telephone

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ketkoag: Legendary Member; Posts: 876; Joined: Thu Apr 10, 2008 8:14 am; Thanked: 13 times

by ketkoag » Mon Jun 01, 2009 1:22 am

Sales of telephones have increased dramatically over the last year. In order to take advantage of this increase, Mammoth Industries plans to expand production of its own model of telephone, while continuing its already very extensive advertising of this product.
Which of the following, if true, provides most support for the view that Mammoth Industries cannot increase its sales of telephones by adopting the plan outlined above?
(A) Although it sells all of the telephones that it produces, Mammoth Industries’ share of all telephone sales has declined over the last year.
(B) Mammoth Industries’ average inventory of telephones awaiting shipment to retailers has declined slightly over the last year.
(C) Advertising has made the brand name of Mammoth Industries’ telephones widely known, but few consumers know that Mammoth Industries owns this brand.
(D) Mammoth Industries’ telephone is one of three brands of telephone that have together accounted for the bulk of the last year’s increase in sales.
(E) Despite a slight decline in the retail price, sales of Mammoth Industries’ telephones have fallen in the last year.

whats wrong with A

Source: Beat The GMAT — Critical Reasoning | Mon Jun 01, 2009 1:22 am

vyomb: Junior | Next Rank: 30 Posts; Posts: 23; Joined: Thu Feb 26, 2009 1:19 am; Thanked: 3 times; GMAT Score:650

telephone

by vyomb » Mon Jun 01, 2009 1:30 am

The answer should be C

refer the below statement-
Mammoth industries relies on advertising.. so if advertisement of the product is weak then we can point out the statement that weakens the plan.
Mammoth Industries plans to expand production of its own model of telephone, while continuing its already very extensive advertising of this product

Vemuri: Legendary Member; Posts: 682; Joined: Fri Jan 16, 2009 2:40 amFollowed by: 1 member; Thanked: 32 times

Re: telephone

by Vemuri » Mon Jun 01, 2009 2:35 am

IMO E.

sudeep_ar: Senior | Next Rank: 100 Posts; Posts: 73; Joined: Sat Dec 22, 2007 2:52 pm; Thanked: 1 times

by sudeep_ar » Mon Jun 01, 2009 7:09 am

IMO E..

gmatstud: Junior | Next Rank: 30 Posts; Posts: 21; Joined: Mon Sep 15, 2008 1:22 am; Location: India; Thanked: 1 times; GMAT Score:630

Re: telephone

by gmatstud » Mon Jun 01, 2009 7:19 am

IMO E. What is OA?

Here we need to find an answer that proves that Mammoth industries cannot increase sales by increasing the production of its models.

A- As it sells all telephones, if it produces more, it may sell those also. This can support Mammoth's plans

B- Here, its more of a supply-chain management issue. irrelevant.

C- Mamoth may not care for the brand as long as its product sells.

D- No flaw here. May support Mammoth's plans instead

E- Here, even though the price went down, sales of Mammoth ndustries telephones went down. So increasing the production will not help here as they are not even selling their current production of telephones. This is a flaw in what Mammoth plans to do. Hence E.

Musicolo: Master | Next Rank: 500 Posts; Posts: 116; Joined: Sun Feb 01, 2009 10:56 am

by Musicolo » Mon Jun 01, 2009 7:30 am

Its really a tough choice between A and E. When constrained with time at test taking I would go for E but can not offer wise explanation why E instead of A. Just a hunch.
Can someone offer some better explanation?

sudeep_ar: Senior | Next Rank: 100 Posts; Posts: 73; Joined: Sat Dec 22, 2007 2:52 pm; Thanked: 1 times

by sudeep_ar » Mon Jun 01, 2009 7:48 am

Musicolo wrote:Its really a tough choice between A and E. When constrained with time at test taking I would go for E but can not offer wise explanation why E instead of A. Just a hunch.
Can someone offer some better explanation?

A) Although it sells all of the telephones that it produces, Mammoth Industries’ share of all telephone sales has declined over the last year.
==> It implies that MI is selling all the inventory of that telephone but still market share declined. So that means if MI increase the inventory (as per plan) then also it can sell the telephone and increase the market share.
So it doesn't weaken but strengthen the argument.

ketkoag: Legendary Member; Posts: 876; Joined: Thu Apr 10, 2008 8:14 am; Thanked: 13 times

Re: telephone

by ketkoag » Mon Jun 01, 2009 11:13 am

Vemuri wrote:IMO E.

please explain why u didn't select A..

dtweah: Master | Next Rank: 500 Posts; Posts: 487; Joined: Fri Mar 27, 2009 5:49 am; Thanked: 36 times

by dtweah » Mon Jun 01, 2009 12:30 pm

Musicolo wrote:Its really a tough choice between A and E. When constrained with time at test taking I would go for E but can not offer wise explanation why E instead of A. Just a hunch.
Can someone offer some better explanation?

“Although it sells all of the telephones that it produces, Mammoth Industries’ share of all telephone sales has declined over the last year. “

Nothing above suggests that Mammoth’s telephone sales cannot increase the next year. Remember, Mammoth is doing extensive advertisement as stated in the passage, so just b/c sales fell last year doesn’t mean they cannot rise next year.

In E. Mammoth has already lowered price. Does it have to sell at price 0 before it makes profit? You have a strong reason to believe that despite advertisement, sales will not increase, since with lower price sales still has not increased. This price information separates A and E.

ketkoag: Legendary Member; Posts: 876; Joined: Thu Apr 10, 2008 8:14 am; Thanked: 13 times

by ketkoag » Tue Jun 02, 2009 1:17 am

dtweah wrote:
Musicolo wrote:Its really a tough choice between A and E. When constrained with time at test taking I would go for E but can not offer wise explanation why E instead of A. Just a hunch.
Can someone offer some better explanation?
“Although it sells all of the telephones that it produces, Mammoth Industries’ share of all telephone sales has declined over the last year. “

Nothing above suggests that Mammoth’s telephone sales cannot increase the next year. Remember, Mammoth is doing extensive advertisement as stated in the passage, so just b/c sales fell last year doesn’t mean they cannot rise next year.

In E. Mammoth has already lowered price. Does it have to sell at price 0 before it makes profit? You have a strong reason to believe that despite advertisement, sales will not increase, since with lower price sales still has not increased. This price information separates A and E.

thanks for a nice explanation.. I overlooked this detail, ahh what was i thinking!!

OA is E

sudeep_ar: Senior | Next Rank: 100 Posts; Posts: 73; Joined: Sat Dec 22, 2007 2:52 pm; Thanked: 1 times

by sudeep_ar » Wed Jun 03, 2009 12:11 am

dtweah wrote: “Although it sells all of the telephones that it produces, Mammoth Industries’ share of all telephone sales has declined over the last year. “

Nothing above suggests that Mammoth’s telephone sales cannot increase the next year. Remember, Mammoth is doing extensive advertisement as stated in the passage, so just b/c sales fell last year doesn’t mean they cannot rise next year.

dtweah,

I want to add. As already wrote earlier in above it is not implying the sales have fallen but rather the share of sales has declined.
e.g. where sales can rise even when share of sales has fallen.
2 years back : total sales: 100 MI sales: 50 ==> share (50%)
1 year back : total sales: 150 MI sales: 60 ==> share (40%)

nicolette: Master | Next Rank: 500 Posts; Posts: 197; Joined: Tue Apr 22, 2014 4:03 am

by nicolette » Sun May 15, 2016 2:42 pm

My intuition whispers that it is A

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