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Events & Promotions

Events & Promotions in June
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Last August the XT chain

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Last August the XT chain [#permalink] New post 02 Oct 2013, 06:24
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Question Stats:

41% (02:07) correct 59% (01:26) wrong based on 285 sessions
Last August the XT chain of gasoline stations had a temporary sales promotion in effect. In the promotion, any customer who made a purchase of ten or more gallons of gasoline was entitled to a free car wash. For the month of August, XT experienced a ten percent increase in gasoline sales as compared to sales in August the previous year, so evidently the promotion was successful as a means of boosting sales.
In evaluating the argument, it would be most helpful to answer which of the following?
A. In the areas in which XT’s gasoline stations operate, how did total combined gasoline sales for all gasoline stations last August compare with sales for the previous August?
B. Was the money that XT earned from the increase in gasoline sales enough to offset the cost of providing free car washes during the promotion?
C. Were there any customers who bought ten or more gallons at an XT gasoline station during the promotion who would have or more gallons at an XT gasoline in lower quantities, but more frequently, if the promotion had not been in effect?
D. Did XT or any of its gasoline stations have to pay other businesses to provide the car washes that customers were offered in the promotion?
E. Are XT’s gasoline sales in August usually significantly higher than one twelfth of XT’s annual gasoline sales?
[Reveal] Spoiler: OA

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Re: Last August the XT chain [#permalink] New post 02 Oct 2013, 09:11
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To find out if the promotion was successful, we need to proof of their claim. The claim being that: For the month of August, XT experienced a ten percent increase in gasoline sales as compared to sales in August the previous year
Choice A is the only answer choice that compares last August sales to previous August
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Re: Last August the XT chain [#permalink] New post 02 Oct 2013, 15:30
I think its C
Even if the sales compared to previous year were high how does it tell that campaign didnt play his role.

C shows that is there are customers a who bought.more than 10 gallaons frequently but not upfront then they did irrespective of the campaign.

If they didn't do then clearly campaign helped.
If they did then campaign did not help.

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Re: Last August the XT chain [#permalink] New post 03 Oct 2013, 03:08
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Hi Suntwin,

I agree - C is tempting. TO be honest it took me a little while to work out why it was wrong :)

The issue is that even if we have C, we have no evidence for why overall sales went up.

The paragraph tells us that overall sales went up 10% - not that the amount of people buying more than 10 gallons went up.

If it had said '10% more people bought over 10 gallons' - then you would have been correct.

Does that make sense?

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Re: Last August the XT chain [#permalink] New post 04 Oct 2013, 08:02
Why not B?

Say if we have the proof that the total sales of this year was great than total sales of last year. However if the cost of providing free car washes during the promotion > total earning, than the promotion wasn't successful, right?
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Re: Last August the XT chain [#permalink] New post 04 Oct 2013, 09:27
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summer101 wrote:
Why not B?

Say if we have the proof that the total sales of this year was great than total sales of last year.
However if the cost of providing free car washes during the promotion > total earning, than the promotion wasn't successful, right?


B is wrong because it is out of scope.
The argument says that there was increase in sales and this increase was because of promotion. Thats it.. You dont need to go into revenues, profits etc.. It is causal argument that is.. X causes Y
So, if you say that other gasoline pumps don't see the similar increase then you could say that the argument is valid, however if it is opposite, then the argument may not likely to be true

Think this way, apple announced a promotion that you ll get data usage free with evry phone you purchased and consequently there was increase in sales. Would you be quick in saying that promtion caused the increase. May be.. May be there are another factors such as cut in production cycles of other companys handsets.. Hence,there are n number of causes that can cause the increase in sales, promotion may or may not help.

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Re: Last August the XT chain [#permalink] New post 27 May 2014, 14:21
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Lets take a math approach.
According to the Passage:
Aug-LY: 100 Sales
Aug-TY: 110 Sales

Did the sales increase? - Yes
Did the sales increase because of free car wash? - Don't know.

Answer Choice - A:
Total sales of ALL ( say 10) gas stations where XT operates. Some could be non-XT
Aug-LY: 1000 Sales
Aug-TY: 5000 Sales
Now XT does not look so good - Does it? :D

-----------
Aug-LY-1000
Aug-TY-1010
Now XT looks good.

So answer choice A evaluates.
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Re: Last August the XT chain [#permalink] New post 24 Jun 2014, 04:38
What's wrong with E? Question E tells us that whether August sales is higher than average of the year.
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Re: Last August the XT chain [#permalink] New post 24 Jun 2014, 21:36
pretzel wrote:
What's wrong with E? Question E tells us that whether August sales is higher than average of the year.

E says: Are XT’s gasoline sales in August usually significantly higher than one twelfth of XT’s annual gasoline sales?

The argument is basically comparing the sales in August, in two consecutive years and then concludes that the higher sales in one of the years is attributed to the promotion. E does not, in any way, address this.
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Last August the XT chain [#permalink] New post 25 Jun 2014, 07:25
I think I can add my inputs here. First of all, take this for granted that carrying out a promotion can lead to increase in sales but may not result in an immediate increase in profits or returns.

Last August the XT chain of gasoline stations had a temporary sales promotion in effect. In the promotion, any customer who made a purchase of ten or more gallons of gasoline was entitled to a free car wash. For the month of August, XT experienced a ten percent increase in gasoline sales as compared to sales in August the previous year, so evidently the promotion was successful as a means of boosting sales.
In evaluating the argument, it would be most helpful to answer which of the following?
A. In the areas in which XT’s gasoline stations operate, how did total combined gasoline sales for all gasoline stations last August compare with sales for the previous August? Sounds good. If all the gasoline stations including those that did not implement a promotional plan see an increase in sales along with XT chain, then the success cannot be attributed to the promotion. So answer to this question evaluates our conclusion.
B. Was the money that XT earned from the increase in gasoline sales enough to offset the cost of providing free car washes during the promotion? Whether cost of providing free car washes can be offset by the increase in gasoline sales is irrelevent to find whether the increase in sales is actually due to the promotion.
C. Were there any customers who bought ten or more gallons at an XT gasoline station during the promotion who would have or more gallons at an XT gasoline in lower quantities, but more frequently, if the promotion had not been in effect? Trap answer. How the customers bought those quantities, be it in large quantities at a time ot in smaller quantities frequently, is totally useless to identify the effect of a promotion on sales.
D. Did XT or any of its gasoline stations have to pay other businesses to provide the car washes that customers were offered in the promotion? Same as B and C, this choice is irrelevent too.
E. Are XT’s gasoline sales in August usually significantly higher than one twelfth of XT’s annual gasoline sales? The answer yes or no this question would not help evaluate our conclusion.
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Re: Last August the XT chain [#permalink] New post 06 Jul 2014, 06:42
what if we break it down with numbers.

Sales for last year aug at 5 different outlets (1st being XT ) in gallons - 100, 110, 90, 80, 110. Total sales = 490

Sales for this year aug - 110, 100, 95, 85, 100. Total sales = 490

I am still unable to understand how evaluating total sales figures will help us understand effect of promotions ?

Pls help.
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Last August the XT chain [#permalink] New post 06 Jul 2014, 20:44
A actually says: total combined gasoline sales for all gasoline stations. This includes XT and non XT gasoline stations. So, if total combined gasoline sales have increased, then there is reason to believe that this increase was a general trend, and not specifically attributed to promotion.
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Re: Last August the XT chain [#permalink] New post 06 Jul 2014, 20:58
Thank you. I think I finally understood what option A meant.
Re: Last August the XT chain   [#permalink] 06 Jul 2014, 20:58
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