IR question - Beverage consumption

[gmattesttaker2]

Hello,

Can you please assist with this IR question?

For: The type of beverage milk that experienced the greatest magnitude percent change in consumption in Malactica from 1980 to 2005 was the correct answer is [spoiler]Low-fat milk (1%) and skim milk[/spoiler]. I selected Plain whole milk


This is the official explanation:


B - Low-fat milk (1%) and skim milk. You are looking for the greatest magnitude percent change, so a large percent decrease could be the winner. Let's investigate each case by comparing visually the size of the column segment in 2005 with the corresponding segment in 1980, looking for large proportional changes either up or down.

a) Flavored milks: Very little proportional change in size from 1980 to 2005.

b) Low-fat milk (1%) and skim milk: Appears to almost double in size, which would represent nearly a 100% increase.

c) Plain reduced-fat milk (2%): Very slight growth, proportionally.

d) Plain whole milk: A big decrease in absolute terms, but percent-wise, only a little more than a 50% decline - certainly not close to 100% decline.

So the clear winner in percent terms is low-fat, with its nearly 100% increase. Closer inspection would reveal an approximately 80% increase, whereas plain whole fell only about 60%.


I was able to eliminate "Flavored milks" looking at the graph.

For "Low-fat milk (1%) and skim milk" in 1980, it seems to me that the gallons consumed were about 3 (26 - 23) while in 2005 the gallons consumed were about 5 (18 - 13). Hence there was about a 66% increase.

For Plain whole milk there was a drop from about 16 gallons in 1980 to about 7 gallons in 2005 (which is approx. a 44% decrease).


I was wondering if this is the correct way to approach this problem?

Thanks for your help.

Best Regards,
Sri

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Hi Sri,

This IR question should also have probably been posted in the IR Forum, but I'll confirm your approach.

Percentage Change is an issue that Business Schools want to know that you can handle, so you'll certainly see it in the Quant section and possibly in IR (as you saw it here). Since the prompt asks for the greatest "magnitude percent change", we have to keep an open mind about whether the result is an increase or a decrease.

Your visual estimate matches mine; while I disagree with the estimates offered by the official explanation, I DO agree with the result. Low fat/Skim milk has a greater magnitude percent change than Whole milk. Your tactic to "visually eliminate" some of the options is also correct. Oftentimes, questions that come with a chart, graph or table will include a "pattern matcher's" shortcut that can allow you to avoid certain calculations if you can spot the shortcut.

GMAT assassins aren't born, they're made,
Rich