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Bob's Cafe, a busy restaurant, has decided to stop serving

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Re: Bob's Cafe, a busy restaurant, has decided to stop serving [#permalink] New post 16 Jun 2013, 23:06
Bob’s Café, a busy restaurant, has decided to stop serving steak, which takes much longer to cook, and concentrate instead on poultry dishes. The management believes that this will allow servers to speed up customer turnover and therefore maximize profits by serving as many customers as possible at each meal.

The Bob’s Café management’s plan to speed up customer turnover would be most undermined by which of the following?
A. Chicken takes only half as long to cook as steak in most instances.
B. Chicken is less expensive than steak for Bob’s Café to purchase.
C. Chicken dishes can be sold for nearly as much as steak dishes.
D. The bistro next door to Bob’s Café will continue to serve steak.
E. Customers who order chicken tend to order dessert much more frequently than do customers who order steak.


I would go with C. Its required to weaken the mgmt plan that moving from chicken from steak will increase the profit. In general, profit will increase if price of same amount of chicken will be equal to or more than price for that amount of steak. We assume nothing about the customer preference or sale of steak in other restaurant.

Option C says Chicken dishes can be sold for nearly as much as steak dishes. So, it might not be possible to generate profit more than that when steak is being sold.
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Re: Bob's Cafe, a busy restaurant, has decided to stop serving [#permalink] New post 17 Jun 2013, 00:08
umeshpatil wrote:


I would go with C. Its required to weaken the mgmt plan that moving from chicken from steak will increase the profit. In general, profit will increase if price of same amount of chicken will be equal to or more than price for that amount of steak. We assume nothing about the customer preference or sale of steak in other restaurant.

Option C says Chicken dishes can be sold for nearly as much as steak dishes. So, it might not be possible to generate profit more than that when steak is being sold.


We know that Chicken can be prepared quickly and hence can be sold more even if the selling cost is same.
According to D, if someone wants to have steak only, then the person will go to the next restaurant, hence this weakens the case at hand ...

Hope I am clear
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Re: Bob's Cafe, a busy restaurant, has decided to stop serving [#permalink] New post 17 Jun 2013, 00:47
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Hi umesh & Ankurgupta, I picked E and here is my 2 cents.

ANALYZE THE STIMULUS:

Bob's Cafe new strategy is that it wants the customer turnover ratio is high. The reasons behind that are:
(1) Chicken takes less time to cook
(2) Customers WILL NOT SPEND MORE TIME on eating chicken than on eating steak.

What happens if after customers have done with chicken, they will stay to have other food such as dessert
==> The total time = Time for having chicken + Time for having dessert
The total time spending on chicken MAY BE EQUAL or EVEN GREATER than total time spending on steak.
==> Bob's cafe new strategy based on the high customer turnover will fail.


ANALYZE EACH ANSWER:

A. Chicken takes only half as long to cook as steak in most instances.
Wrong. A strengthen ==> less time cooking, higher customer turnover.

B. Chicken is less expensive than steak for Bob’s Café to purchase.
Wrong. B strengthen ==> less Cost of good sold ==> higher profit.

C. Chicken dishes can be sold for nearly as much as steak dishes.
Wrong. Revenue = Quantity x Price. If price is the same, but quantity increases because of less time cooking ==> Profit may increase.

D. The bistro next door to Bob’s Café will continue to serve steak.
Wrong. Bob's Cafe is a regular restaurant, NOT STEAK ONLY RESTAURANT. Profit of Bob's cafe will decrease ONLY IF it is a steak restaurant. If Bob's cafe does not server steak anymore ==> it will lost customers to the next door bistro ==> Its profit decreases.

E. Customers who order chicken tend to order dessert much more frequently than do customers who order steak.
Correct. E focus directly on "time spending on food".

Hope that helps.
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Re: Bob's Cafe, a busy restaurant, has decided to stop serving [#permalink] New post 17 Jun 2013, 03:01
D it is for me. because if the competition continues to serve something and our restaurant stops they might lose customers to that Bistro.

I dont think it is C because Selling Price doesn't mean the same as Profit Margin ? Chicken might have the same Retail Price but might have a much lower Margin.
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Re: Bob's Cafe, a busy restaurant, has decided to stop serving [#permalink] New post 17 Jun 2013, 07:10
Hi Ivy League,

I think you should go re-read the question. It is all about 'customer turnover'. It is not about the general plan for the business to be successful.

If you only care about 'customer turnover' which we do - then it's clear that E is correct. This is the only one that gives evidence that just serving chicken will slow 'customer turnover'

Hope that makes sense.

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Re: Bob's Cafe, a busy restaurant, has decided to stop serving [#permalink] New post 17 Jun 2013, 21:53
I go with D.

To people who have got the answer as C, can you please justify.

agdimple333 wrote:
Bob’s Café, a busy restaurant, has decided to stop serving steak, which takes much longer to cook, and concentrate instead on poultry dishes. The management believes that this will allow servers to speed up customer turnover and therefore maximize profits by serving as many customers as possible at each meal.

The Bob’s Café management’s plan to speed up customer turnover would be most undermined by which of the following?
A. Chicken takes only half as long to cook as steak in most instances.
B. Chicken is less expensive than steak for Bob’s Café to purchase.
C. Chicken dishes can be sold for nearly as much as steak dishes.
D. The bistro next door to Bob’s Café will continue to serve steak.
E. Customers who order chicken tend to order dessert much more frequently than do customers who order steak.


I am not convinced with OA and OE, i will post the OA after some responses..
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Re: Bob's Cafe, a busy restaurant, has decided to stop serving [#permalink] New post 18 Jun 2013, 04:01
plumber250 wrote:
Hi Ivy League,

I think you should go re-read the question. It is all about 'customer turnover'. It is not about the general plan for the business to be successful.

If you only care about 'customer turnover' which we do - then it's clear that E is correct. This is the only one that gives evidence that just serving chicken will slow 'customer turnover'

Hope that makes sense.

James


But doesnt it also mention "speed up customer turnover and therefore maximize profits by serving as many customers as possible at each meal."

If the margin is much lower he can double or triple is turnover but not "maximize profits"

Now even more confused :?
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Re: Bob's Cafe, a busy restaurant, has decided to stop serving [#permalink] New post 18 Jun 2013, 04:05
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Hi Ivy, No - This is really important.

Look at the question you're being asked:

The Bob’s Café management’s plan to speed up customer turnover would be most undermined by which of the following?

Where there does it ask about profit or anything like that? It doesn't it just asks about 'customer turnover' - so that's what you've got to answer. What would affect the plan to speed up turnover.

The passage itself may talk about many things - this is why GMAT is not easy! You just have to answer the question being asked.
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Re: Bob's Cafe, a busy restaurant, has decided to stop serving [#permalink] New post 18 Jun 2013, 04:15
Aah now i get what you were trying to say. I simply overlooked that the question restricted itself to the customer turnover.

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Re: Bob's Cafe, a busy restaurant, has decided to stop serving [#permalink] New post 18 Jun 2013, 04:16
I think the answer is

E. Customers who order chicken tend to order dessert much more frequently than do customers who order steak.
As dessert will take time and people will stay longer for dessert.
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Re: Bob's Cafe, a busy restaurant, has decided to stop serving [#permalink] New post 18 Jun 2013, 17:00
agdimple333 wrote:
Bob’s Café, a busy restaurant, has decided to stop serving steak, which takes much longer to cook, and concentrate instead on poultry dishes. The management believes that this will allow servers to speed up customer turnover and therefore maximize profits by serving as many customers as possible at each meal.

The Bob’s Café management’s plan to speed up customer turnover would be most undermined by which of the following?
A. Chicken takes only half as long to cook as steak in most instances.
B. Chicken is less expensive than steak for Bob’s Café to purchase.
C. Chicken dishes can be sold for nearly as much as steak dishes.
D. The bistro next door to Bob’s Café will continue to serve steak.
E. Customers who order chicken tend to order dessert much more frequently than do customers who order steak.


I am not convinced with OA and OE, i will post the OA after some responses..


The argument says that the cafe wants to increase the turn around time to maximize profit. Now one way of attacking this is that price of steak is higher and the turnaround time even if it is cut by half can't guarantee that we will make the same amount of profit.
However here the argument weakens the argument by saying that customers who order chicken also frequently order desserts so your turn around time takes a hit. That's E wins.
A,B and C actually strengthens the argument and D is irrelevant.
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Re: Bob's Cafe, a busy restaurant, has decided to stop serving [#permalink] New post 27 Jun 2013, 23:31
ellenhch wrote:
I was deciding between D and E. I ultimately chose E because if people order chicken and also order dessert, then turnover in customers would not increase. If anything, the cooking of the steak compared to cooking chicken and customers also ordering dessert results in...the same number of customers at the resturant. It weakens the turnover argument.

Then I thought if chicken costs $15, and steak is $45, even if I order dessert (which is $10), my chicken + dessert = $25, versus my steak of $45. Using the same logic of same # customers above, then I wouldn't have increased profits either.

I feel that this answer best acknowledges both points of making less profits, and no change/decrease in customer turnover. But who knows! I'm not too sure about my answer!


The reason to eliminate could be that since customers will order dessert more frequently when they order chicken compared to streak, the more frequent order will tend them to finish the food earlier than finishing the same when they would have ordered streak.

The food is finished earlier allowing other/more customers to come early and maximise the profit of the restraunt.
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Re: Bob's Cafe, a busy restaurant, has decided to stop serving [#permalink] New post 28 Jul 2013, 04:32
I saw this question in Grockit..
Answer is E..
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Re: Bob's Cafe, a busy restaurant, has decided to stop serving [#permalink] New post 28 Jul 2013, 05:21
This is my reasoning:
My answer will be E because:
The conclusion states that customer turnover leads to profit.
Answer E provides an alternative explanation by stating people who ordered chicken also order desert that will lead to profit. Please comment on reasoning. Thanks.
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Re: Bob's Cafe, a busy restaurant, has decided to stop serving [#permalink] New post 30 Jul 2013, 19:07
Bob’s Café, a busy restaurant, has decided to stop serving steak, which takes much longer to cook, and concentrate instead on poultry dishes. The management believes that this will allow servers to speed up customer turnover and therefore maximize profits by serving as many customers as possible at each meal.

The Bob’s Café management’s plan to speed up customer turnover would be most undermined by which of the following?
A. Chicken takes only half as long to cook as steak in most instances.
it supports the premise that steak takes longer time to cook
B. Chicken is less expensive than steak for Bob’s Café to purchase.
out of scope. its not relevant to time needed to serve either steak or poultry
C. Chicken dishes can be sold for nearly as much as steak dishes.
it supports the plan as the revenue will not be lost due to the plan
D. The bistro next door to Bob’s Café will continue to serve steak.
out of scope. it does not provide evidence that the customer turnover at Bob's cafe will not be speed up
E. Customers who order chicken tend to order dessert much more frequently than do customers who order steak.
As the customer who order chicken tend to order dessert more frequent, the customer will spend more time at the cafe, and the customer turnover will not be guaranteed to be speed up as planed. This is therefore the best
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Re: Bob's Cafe, a busy restaurant, has decided to stop serving [#permalink] New post 31 Jul 2013, 07:30
agdimple333 wrote:
Bob’s Café, a busy restaurant, has decided to stop serving steak, which takes much longer to cook, and concentrate instead on poultry dishes. The management believes that this will allow servers to speed up customer turnover and therefore maximize profits by serving as many customers as possible at each meal.

The Bob’s Café management’s plan to speed up customer turnover would be most undermined by which of the following?
A. Chicken takes only half as long to cook as steak in most instances. Strengthens the argument as this will help increase turnover time.
B. Chicken is less expensive than steak for Bob’s Café to purchase. Strengthens the argument based on potential increase in profit based on cost of product, not turnover of customers.
C. Chicken dishes can be sold for nearly as much as steak dishes. Strict comparison of cost of the dishes, not of turn over time.
D. The bistro next door to Bob’s Café will continue to serve steak. This may indeed cause a loss of some diners. But has nothing to do with customer turnover.
E. Customers who order chicken tend to order dessert much more frequently than do customers who order steak. We have a winner. Staying for desert increases the turn over time of the table. Amount spent by table eating desert = $120, Amount spend by table not eating desert = $100. Over a service number of turnovers when customers all eat desert = 4. Over a service number of turn overs when customers do not eat desert = 5. Desert = $480 per service, Non Desert $500 over the service. Assuming 20 tables, this represents up to $400 lost per service if everyone has chicken and desert.


I am not convinced with OA and OE, i will post the OA after some responses..


Premise: Increased table turn over = Increased profit per table. Only E relates to why turn over, and profit, could decrease.
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Re: Bob's Cafe, a busy restaurant, has decided to stop serving [#permalink] New post 01 Aug 2013, 05:20
Bob’s Café, a busy restaurant, has decided to stop serving steak, which takes much longer to cook, and concentrate instead on poultry dishes. The management believes that this will allow servers to speed up customer turnover and therefore maximize profits by serving as many customers as possible at each meal.

The Bob’s Café management’s plan to speed up customer turnover would be most undermined by which of the following?

Main plan of management-> Stop steak and in that time make more chicken and hence increase profits. Assumption is time saved will make more chicken dishes whose revenue> revenue earned from streak.
Now we do not know the price relationship between chicken and streak. we also do not know exactly how much time is needed to make chicken as compared to steak. We could undermine the management's plan if we know that without taking any assumption into consideration we still can prove that they will not be able to maximise their profit.


A. Chicken takes only half as long to cook as steak in most instances.----Supports
B. Chicken is less expensive than steak for Bob’s Café to purchase.----Supports
C. Chicken dishes can be sold for nearly as much as steak dishes.---- Now here, if no of chicken= no of streaks then if no steak then no of chicken is doubled,May be profitable if price of chicken is more. Cant be said for sure that profits will still be less. hence could support.
D. The bistro next door to Bob’s Café will continue to serve steak.----here we can say for sure that the bistro will offer something that bob's cafe cant, and also bob's cafe will lose out business here. And also may be bistro also sells chicken, so there are bigger chances that bob's cafe will lose out here and might face loses...Here assumptions are least.
E. Customers who order chicken tend to order dessert much more frequently than do customers who order steak.---Here it could either weaken or strengthen since,
Strengthen: if dessert is also ordered, profits are definite to increase,
Weaken: The time taken will be more, hence the net produce of chicken dishes might be less and then price of chicken + price of dessert could be less than price of steak.
So this cant be.

Though i would not say D is the best answer but it is still better than the rest of the options. :-D
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Re: Bob's Cafe, a busy restaurant, has decided to stop serving [#permalink] New post 07 Aug 2013, 21:22
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agdimple333 wrote:
Bob’s Café, a busy restaurant, has decided to stop serving steak, which takes much longer to cook, and concentrate instead on poultry dishes. The management believes that this will allow servers to speed up customer turnover and therefore maximize profits by serving as many customers as possible at each meal.

The Bob’s Café management’s plan to speed up customer turnover would be most undermined by which of the following?
A. Chicken takes only half as long to cook as steak in most instances.
B. Chicken is less expensive than steak for Bob’s Café to purchase.
C. Chicken dishes can be sold for nearly as much as steak dishes.
D. The bistro next door to Bob’s Café will continue to serve steak.
E. Customers who order chicken tend to order dessert much more frequently than do customers who order steak.


I am not convinced with OA and OE, i will post the OA after some responses..


Responding to a pm:

The cafe has decided to stop serving steak since it takes too much time. So the assumption is that people who order steak right now will start ordering chicken and hence customer turnover will increase. More customers will mean more profits.

Now, many things can undermine this argument since we made many assumptions. Some of these things are:

1. Chicken sells at a much cheaper price than steak.
2. Customers who want steak will switch the cafe rather than the meat.
3. Customers who eat chicken take much longer to finish than customers who eat steak.
etc

Let's look at options (C), (D) and (E)

C. Chicken dishes can be sold for nearly as much as steak dishes.
This strengthens our argument. Chicken cooks faster so leads to higher customer turnover and sells at the same price so it does lead to higher profits.

D. The bistro next door to Bob’s Café will continue to serve steak.
This option kind of hints at "people may switch cafes" but it doesn't say so. We don't know whether people will switch cafes or meat so it doesn't undermine the argument. We need an option to specify that they will prefer to switch cafes.

E. Customers who order chicken tend to order dessert much more frequently than do customers who order steak.
This is no. 3 in our list above. If people who eat chicken order dessert too, they will take longer to finish and hence the customer turnover may not increase. It may actually decrease. We don't know the cost of dessert and hence cannot say anything about profits. But this option does undermine our "increase customer turnover" logic.

Hence answer (E)
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Re: Bob's Cafe, a busy restaurant, has decided to stop serving [#permalink] New post 08 Aug 2013, 12:19
I think E is correct because question says what undermines the plan of speed up the customer turnover where D undermines the plan of getting more profit....
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Re: Bob's Cafe, a busy restaurant, has decided to stop serving [#permalink] New post 08 Aug 2013, 13:44
agdimple333 wrote:
Bob’s Café, a busy restaurant, has decided to stop serving steak, which takes much longer to cook, and concentrate instead on poultry dishes. The management believes that this will allow servers to speed up customer turnover and therefore maximize profits by serving as many customers as possible at each meal.

The Bob’s Café management’s plan to speed up customer turnover would be most undermined by which of the following?
A. Chicken takes only half as long to cook as steak in most instances. speeds up customer turn over
B. Chicken is less expensive than steak for Bob’s Café to purchase.has nothing to do with customer turnover
C. Chicken dishes can be sold for nearly as much as steak dishes.has nothing to do with customer turnover
D. The bistro next door to Bob’s Café will continue to serve steak. irrelevant
E. Customers who order chicken tend to order dessert much more frequently than do customers who order steak.
. correct

correct, the cafe is getting rid of steak because it take too long to make. Chicken takes less time, but if more order dessert when ordering chicken, this will increase customer turnover. The benefit of offering only chicken will be canceled because of the increased turnover caused by additional dessert orders.
Re: Bob's Cafe, a busy restaurant, has decided to stop serving   [#permalink] 08 Aug 2013, 13:44
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