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A manufacturer of men's dress socks sought to increase [#permalink]
07 Apr 2004, 05:54
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A manufacturer of men's dress socks sought to
increase profits by increasing sales. The size of its
customer pool was remaining steady, with the aver-
age customer buying twelve pairs of dress socks per
year. The company's plan was to increase the
number of promotional discount-sale periods to one
every six months.
Which of the following, if it is a realistic possibility,
casts the most serious doubt on the viability of the
(A) New manufacturing capacity would not be
required if the company were to increase the
number of pairs of socks sold.
(B) Inventory stocks of merchandise ready for sale
would be high preceding the increase in the
number of discount-sale periods.
(C) The manufacturer's competitors would match
its discounts during sale periods, and its
customers would learn to wait for those times
to make their purchases.
(D) New styles and colors would increase
customers' consciousness of fashion in dress
socks, but the customers' requirements for
older styles and colors would not be reduced.
(E) The cost of the manufacturer's raw materials
would remain steady, and its customers
would have more disposable income.