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# Companies that must determine well in advance of the

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16 Jan 2013, 05:05
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Question 1
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77% (01:50) correct 23% (00:36) wrong based on 26

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Question 2
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73% (01:18) correct 27% (00:27) wrong based on 22

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Question 3
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77% (02:07) correct 23% (00:12) wrong based on 22

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Companies that must determine well in advance of the selling season how many units of a new product to manufacture often underproduce products that sell well and have overstocks of others. The increased incidence in recent years of mismatches between production and demand seems ironic, since point-of-sale scanners have improved data on consumers’ buying patterns and since flexible manufacturing has enabled companies to 24 produce, cost-effectively, small quantities of goods. This type of manufacturing has greatly increased the number of new products introduced annually in the United States. However, frequent introductions of new products have two problematic side effects. For one, they reduce the average lifetime of products; more of them are neither at the beginning of their life (when prediction is difficult) or at the end of their life (when keeping inventory is expensive because the products will soon become obsolete). For another, as new products proliferate, demand is divided among a growing number of stock-keeping units (SKU’s). Even though manufacturers and retailers can forecast aggregate demand with some certainty, forecasting accurately how that demand will be distributed among the many SKU’s they sell is difficult. For example, a company may be able to estimate accurately the aggregate number of shoes it will sell, but it may be uncertain about which specific types of shoes will sell more than other types.
Q35:Which of the following most accurately describes the function of the last sentence in the passage (Last 2 lines)?
A.To cite a situation in which the aggregate demand is more important than the distribution of demand among SKU’s
B.To refute an assertion about the side effects of flexible manufacturing
C.To illustrate an assertion about companies’ ability to forecast demand
D.To provide an example of ways in which companies address the difficulties of forecasting demand
E.To note an exception to the author’s assertion about distributing demand among SKU’s

[Reveal] Spoiler:
C

The passage suggests which of the following about divided demand among a growing number of SKU’s?
A. It has increased the average lifetime of products.
B. It has resulted from retailer’s attempts to predict demand more accurately and
avoid both understocks and overstocks.
C. It has decreased the use of flexible manufacturing by companies.
D. It has not increased the expense of keeping inventory of certain products.
E. It has not prevented companies from predicting aggregate demand with some certainty.

[Reveal] Spoiler:
E

According to the passage, which of the following has led to growth in the number of new products introduced in the United States each year?
A. Reduced average lifetime of products
B. Increased ability to forecast aggregate demand
C. More cost-effective ways of keeping inventory for products
D. Cost-effective production of small quantities of goods
E. Increased ability to divide demand among a number of SKU’s and to forecast how that demand will be distributed among those SKU’

[Reveal] Spoiler:
D

[Reveal] Spoiler: Question #1 OA
[Reveal] Spoiler: Question #2 OA
[Reveal] Spoiler: Question #3 OA

Last edited by roopika2990 on 26 Jan 2013, 23:58, edited 1 time in total.
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Re: Companies that must detemine well in advance of the selling [#permalink]

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23 Jan 2013, 05:47
IMO 1C / 2E / 3D
Hope It's right.
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Re: Companies that must detemine well in advance of the selling [#permalink]

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23 Jan 2013, 21:03
2 must be D.
'predicet with some certainty for some product " means D.
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05 Mar 2015, 02:19
C E D. It was difficult to understand the first sentence of the passage.
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01 Aug 2015, 04:19
Dear Moderators/Experts,

Can you please shed some light on Q1 options C,D and E. I selected C, but I was unsure about it.

Please if you can explain why not choice D and E -

D. To provide an example of ways in which companies address the difficulties of forecasting demand
E. To note an exception to the author’s assertion about distributing demand among SKU’s

Thanks
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01 Aug 2015, 07:54
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anewbeginning wrote:
Dear Moderators/Experts,

Can you please shed some light on Q1 options C,D and E. I selected C, but I was unsure about it.

Please if you can explain why not choice D and E -

D. To provide an example of ways in which companies address the difficulties of forecasting demand
E. To note an exception to the author’s assertion about distributing demand among SKU’s

Thanks

Hello anewbeginning

Here is the text from passage:
Sentence before (we need it because text from question begins from text "for example" so these sentences are linked):
"Even though manufacturers and retailers can forecast aggregate demand with some certainty, forecasting accurately how that demand will be distributed among the many SKU’s they sell is difficult. "
and sentence from question:
"For example, a company may be able to estimate accurately the aggregate number of shoes it will sell, but it may be uncertain about which specific types of shoes will sell more than other types."

answer D: "To provide an example of ways in which companies address the difficulties of forecasting demand"
According to the passage companies just have these difficulties and we don't know exactly do they do something about it or no. (logically they do, but passage doesn't mention it)

answer E: "To note an exception to the author’s assertion about distributing demand among SKU’s"
This is counteract to what we see in passage:

Even though manufacturers and retailers can forecast aggregate demand with some certainty, forecasting accurately how that demand will be distributed among the many SKU’s they sell is difficult. For example, a company may be able to estimate accurately the aggregate number of shoes it will sell, but it may be uncertain about which specific types of shoes will sell more than other types.

So first sentence says that companies can make total estimate, but can't make estimate of certain type
and further example says that companie can estimate total quantity of shoes but can't estimate sells of specific model of shoes.

We don't have any exception in this example and it completely support assertion from first sentence.

answer C: "To illustrate an assertion about companies’ ability to forecast demand"
First sentence assert that companies can make total estimate, but can't make estimate of certain type and second sentence make specific example of this assertion.
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01 Aug 2015, 12:24
Harley1980 wrote:
anewbeginning wrote:
Dear Moderators/Experts,

Can you please shed some light on Q1 options C,D and E. I selected C, but I was unsure about it.

Please if you can explain why not choice D and E -

D. To provide an example of ways in which companies address the difficulties of forecasting demand
E. To note an exception to the author’s assertion about distributing demand among SKU’s

Thanks

Hello anewbeginning

Here is the text from passage:
Sentence before (we need it because text from question begins from text "for example" so these sentences are linked):
"Even though manufacturers and retailers can forecast aggregate demand with some certainty, forecasting accurately how that demand will be distributed among the many SKU’s they sell is difficult. "
and sentence from question:
"For example, a company may be able to estimate accurately the aggregate number of shoes it will sell, but it may be uncertain about which specific types of shoes will sell more than other types."

answer D: "To provide an example of ways in which companies address the difficulties of forecasting demand"
According to the passage companies just have these difficulties and we don't know exactly do they do something about it or no. (logically they do, but passage doesn't mention it)

answer E: "To note an exception to the author’s assertion about distributing demand among SKU’s"
This is counteract to what we see in passage:

Even though manufacturers and retailers can forecast aggregate demand with some certainty, forecasting accurately how that demand will be distributed among the many SKU’s they sell is difficult. For example, a company may be able to estimate accurately the aggregate number of shoes it will sell, but it may be uncertain about which specific types of shoes will sell more than other types.

So first sentence says that companies can make total estimate, but can't make estimate of certain type
and further example says that companie can estimate total quantity of shoes but can't estimate sells of specific model of shoes.

We don't have any exception in this example and it completely support assertion from first sentence.

answer C: "To illustrate an assertion about companies’ ability to forecast demand"
First sentence assert that companies can make total estimate, but can't make estimate of certain type and second sentence make specific example of this assertion.

Thank You Harley1980

Your explanation is crisp and to the point.
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25 Sep 2016, 07:33
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Re: Companies that must determine well in advance of the   [#permalink] 25 Sep 2016, 07:33
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