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ACME Midwest Sales Manager: I am unhappy to report that

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ACME Midwest Sales Manager: I am unhappy to report that [#permalink] New post 02 Jul 2013, 22:07
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ACME Midwest Sales Manager: I am unhappy to report that the Midwest sales office has had a difficult quarter, and our office will not lead the company in sales this quarter as we usually do.

ACME Executive: Fortunately, the South sales office has had a strong performance this quarter. They usually account for around 10% of company sales, but that figure has improved to 25% for this quarter.

One flaw in the ACME Executive’s response is that it:

(A) does not address the reasons why the ACME Midwest Sales Office had a bad quarter.
(B) neglects the possibility that overall sales have increased dramatically.
(C) assumes an increase in sales percentage resulted from increased performance.
(D) uses percentage data when he should be using absolute number data.
(E) neglects to consider other sales offices.

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[Reveal] Spoiler: OA

Last edited by Zarrolou on 02 Jul 2013, 22:15, edited 1 time in total.
Edited the question, renamed the topic.
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Re: ACME Midwest Sales Manager: I am unhappy to report that [#permalink] New post 02 Jul 2013, 22:31
One flaw in the ACME Executive’s response is that it:

(A) does not address the reasons why the ACME Midwest Sales Office had a bad quarter.
This is not a flaw in the reasoning, since this is not what is discussed by the Executive.

(B) neglects the possibility that overall sales have increased dramatically.
Since we are talking about overall percentages, the increase is not something to worry about.

(C) assumes an increase in sales percentage resulted from increased performance.
Correct, maybe the South is experiencing an economic growth or a nearby office has closed, so the South office will have more clients,...

(D) uses percentage data when he should be using absolute number data.
Since we are talking about the office with the most sales, percentages work just fine.

(E) neglects to consider other sales offices.
This is not a flaw.
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Re: ACME Midwest Sales Manager: I am unhappy to report that [#permalink] New post 02 Jul 2013, 22:56
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vtran wrote:
ACME Midwest Sales Manager: I am unhappy to report that the Midwest sales office has had a difficult quarter, and our office will not lead the company in sales this quarter as we usually do.

ACME Executive: Fortunately, the South sales office has had a strong performance this quarter. They usually account for around 10% of company sales, but that figure has improved to 25% for this quarter.

One flaw in the ACME Executive’s response is that it:


(A) does not address the reasons why the ACME Midwest Sales Office had a bad quarter.
The response nowhere needs to address this matter in the given context.

(B) neglects the possibility that overall sales have increased dramatically.
The response is only talking about the performance/sales of the South sales office.The above point doesn't interfere with that.

(C) assumes an increase in sales percentage resulted from increased performance.

The response is neglecting the fact that maybe the net company sales had reduced owing to bad performances from other sales offices.
Say, initially, the net company sales was 100 and the south sales office share was 10. Now, if due to bad performances across, the net company sales decreased to say 20, and the south sales office share was 5, then actually this relative increase in percentage wouldn't have resulted in an increased performance.


(D) uses percentage data when he should be using absolute number data.

As both the percentages are related to the same office, the percentage data is correct, for a relative comparison.[Note, that extrapolating this increase in percentage to increased performance is not correct, as discussed above]

(E) neglects to consider other sales offices.
This is not required for the given response.He was only talking about the share and performance of the South sales office.
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Re: ACME Midwest Sales Manager: I am unhappy to report that [#permalink] New post 02 Jul 2013, 23:32
IMO the answer should be D.

I see the argument mentions about improved performance and moves to sales increase from 10% to 25% - but the executive is missing 25% of what... As Mau5 clearly illustrates % doesn't make sense when evaluating sales figures..

The executive should be saying south office last year contributed $10M and this quarter performance leads to its yearly contribution to $25M when west office representative says that they might not be single largest contributor..

For e.g. west contributed $50M to last year total sales of $100M, which is split evenly as $12.5M per quarter might only provide $6.5M this year same quarter. To offset this the south could have provided $6.5M an increase from $2.5M from last year..
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Re: ACME Midwest Sales Manager: I am unhappy to report that [#permalink] New post 02 Jul 2013, 23:38
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Zarrolou and Mau5 have great posts. However, I also want to analyze the question in other way by plugging in number. Hope it helps.

First of all, to solve the “flaw of reasoning”, you must think about the structure of the argument before examining the answer choices.

The structure of this argument is:
MW sales Manager: I’m unhappy to say our office will not lead the company in sales this quarter
Executive: South sales office had a strong performance this quarter, because they improved sales from 10% to 25%

What the Executive means? He applauded the South office, his reasoning is based on “percentage” data to conclude the performance. This is one of the most frequent traps in GMAT CR, so always keep your eyes on this.

ANALYZE EACH ANSWER:

(A) does not address the reasons why the ACME Midwest Sales Office had a bad quarter.
Wrong. Out of scope. The executive does not mention the reasons of weak sales of MW office. Keep in mind, in "flaw of reasoning", new information is NOT accepted. Just use information in the stimulus.

(B) neglects the possibility that overall sales have increased dramatically.
Wrong. TEMPTING. But it’s wrong. Because if overall sales increased, and South office’s sales improved from 10% to 25%  Definitely can say the South office’s performance was as good as the Executive said ==> No flaw here.

(C) assumes an increase in sales percentage resulted from increased performance.
Correct. Improvement of percentage does not always mean improvement in performance.
For example:
Before: Total company sales = 100. South office accounted for 10% => Its sales = 10
After: Total company sales = 30. South office accounted for 25% => Its sales = 7.5
Clearly, 25% improvement does not mean anything.

(D) uses percentage data when he should be using absolute number data.
Wrong. Tempting. But it’s wrong, because it is NOT the flaw of this argument. If the total sales of the company increased ==> the use of “percentage” is a good measure.

(E) neglects to consider other sales offices.
Wrong. Clearly out of scope. The argument just focuses on the South office’s performance and its improvement in sales percentage.

Hope it's clear.
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Last edited by pqhai on 02 Jul 2013, 23:49, edited 1 time in total.
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Re: ACME Midwest Sales Manager: I am unhappy to report that [#permalink] New post 02 Jul 2013, 23:46
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nt2010 wrote:
IMO the answer should be D.

I see the argument mentions about improved performance and moves to sales increase from 10% to 25% - but the executive is missing 25% of what... As Mau5 clearly illustrates % doesn't make sense when evaluating sales figures..

The executive should be saying south office last year contributed $10M and this quarter performance leads to its yearly contribution to $25M when west office representative says that they might not be single largest contributor..

For e.g. west contributed $50M to last year total sales of $100M, which is split evenly as $12.5M per quarter might only provide $6.5M this year same quarter. To offset this the south could have provided $6.5M an increase from $2.5M from last year..


Hi nt2010

I don't think D is correct.

The stimulus clearly says: They usually account for around 10% of company sales, but that figure has improved to 25% for this quarter.
"That figure - 25%" refers to percentage of South sales/ company sales.

D says: uses percentage data when he should be using absolute number data. <== This is a flaw of the Executive?

The executive used % to conclude about performance. His reasoning is correct if total sales of company increases ==> improve % = improve in performance (sales).
Thus, we cannot say D is a flaw of the executive's reasoning.

Regards.
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Last edited by pqhai on 02 Jul 2013, 23:47, edited 1 time in total.
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Re: ACME Midwest Sales Manager: I am unhappy to report that [#permalink] New post 02 Jul 2013, 23:47
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nt2010 wrote:
IMO the answer should be D.

I see the argument mentions about improved performance and moves to sales increase from 10% to 25% - but the executive is missing 25% of what... As Mau5 clearly illustrates % doesn't make sense when evaluating sales figures..

The executive should be saying south office last year contributed $10M and this quarter performance leads to its yearly contribution to $25M when west office representative says that they might not be single largest contributor..

For e.g. west contributed $50M to last year total sales of $100M, which is split evenly as $12.5M per quarter might only provide $6.5M this year same quarter. To offset this the south could have provided $6.5M an increase from $2.5M from last year..


The conclusion in the response by the ACME Executive is "the South sales office has had a strong performance this quarter." Using percentage data is not wrong,it is the conclusion which the executive has arrived at from that percentage data,which is at fault. Consider a basic statement like this :

Since our share of total company sales has increased from 10% to 25%, therefore our contribution to the company's total sales has increased. Here, the usage of percentage data is correct, and the conclusion following from that data is also correct.
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Re: ACME Midwest Sales Manager: I am unhappy to report that [#permalink] New post 08 Jul 2014, 05:35
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