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A factory was trying out a new process for producing one of [#permalink]
23 Apr 2005, 22:52
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A factory was trying out a new process for producing one of its products, with the goal of reducing production costs. A trial production run using the new process showed a 15% reduction in costs compared with past performance using the standard process. The production managers therefore concluded that the new process did produce a cost savings.
Which of the following, if true, casts most doubt on the production manager's conclusion?
A: In the cost reduction project that eventually led to the trial of the new process, production managers had initially been seeking cost reductions of 50%.
B: Anaylysis of the trial of the new process showed that the cost reduction during the trial was entirely attributable to a reduction in the number of finished products rejected by quality control.
C: While the trial was being conducted, production costs at the factory for a smiliar product, produced without benefit of the new process, also showed a 15% reduction.
D: Although some of the factory's managers have been arguing that the product is outdated and ought to be redesigned, the use of the new production process does not involve any changes in the finished product.
E: Since the new process differs from the standard process only in the way in which the stages of production are organized and ordered, the cost of the materials used in the product in the same in both processes.