Find all School-related info fast with the new School-Specific MBA Forum

It is currently 22 Jul 2014, 22:19

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

Manufacturers of mechanical pencils make most of the profit

  Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:
Manager
Manager
User avatar
Joined: 05 Nov 2005
Posts: 232
Location: Germany
Followers: 2

Kudos [?]: 6 [0], given: 0

GMAT Tests User
Manufacturers of mechanical pencils make most of the profit [#permalink] New post 11 Nov 2005, 00:45
00:00
A
B
C
D
E

Difficulty:

(N/A)

Question Stats:

0% (00:00) correct 0% (00:00) wrong based on 0 sessions
Manufacturers of mechanical pencils make most of the profit on pencil leads rather than on the pencils themselves. The Write Company, which cannot sell its leads as cheaply as other manufacturers can, plans to alter the design of its mechanical pencil so that it will accept only a new designed Write Company lead, which will be sold at the same price as the Write Company's current lead.

Which of the following, if true, most strongly supports the Write Company's projection that its plan will lead to an increase in its sales of pencil leads?


(A) First-time buyers of mechanical pencils tend to buy the least expensive mechanical pencils available.

(B) Annual sales of mechanical pencils are expected to triple over the next five years.

(C) A Write Company executive is studyiing ways to reduce the cost of manufacturing pencil leads.

(D) A rival manufacturer recently announced similar plans to introduce a mechanical pencil that would accept only the leads produced by that manufacturer.

(E) In extensive test marketing, mechanical-pencil users found the new Write Company pencil markedly superior to other mechanical pencils they had used.
VP
VP
User avatar
Joined: 13 Jun 2004
Posts: 1128
Location: London, UK
Schools: Tuck'08
Followers: 6

Kudos [?]: 21 [0], given: 0

GMAT Tests User
 [#permalink] New post 11 Nov 2005, 01:04
between B and E

I would go for B because B has a direct link with sales and profit.

E is good but a pencil can be very good and very expensive, so maybe nobody will ever buy that pencil...and the only way to make big profit on the leads is to sell specific pencils that can only be used with Write Leads.
Intern
Intern
avatar
Joined: 15 Sep 2005
Posts: 10
Followers: 1

Kudos [?]: 0 [0], given: 0

 [#permalink] New post 11 Nov 2005, 04:22
Antmavel wrote:
between B and E

I would go for B because B has a direct link with sales and profit.

E is good but a pencil can be very good and very expensive, so maybe nobody will ever buy that pencil...and the only way to make big profit on the leads is to sell specific pencils that can only be used with Write Leads.


I would say E. The company assumes that if they change the design then other leads can't be used. E strengthes the arguemnt by stating that their pencil is superior and people buy it.
SVP
SVP
User avatar
Joined: 28 May 2005
Posts: 1743
Location: Dhaka
Followers: 6

Kudos [?]: 30 [0], given: 0

GMAT Tests User
 [#permalink] New post 11 Nov 2005, 06:05
A. Does not affect the sales at all.

B. manufacturer makes money not by selling its pencil but by selling the lead.
so even if the sale is tripling, the manufacturer might not make any profit.

C. Cost is out of scope.

D. weakens the conclusion.

E. is the only one remaining. if the new product is markedly superior to the other pencil, the lead as well as the pencil will sell a lot. that is when they can increase the sale of pencil lead.

_________________

hey ya......

Manager
Manager
avatar
Joined: 23 Apr 2005
Posts: 209
Followers: 1

Kudos [?]: 3 [0], given: 0

GMAT Tests User
 [#permalink] New post 11 Nov 2005, 08:01
Vote for E.

Only with E, Write Company will compete successfully.
Director
Director
avatar
Joined: 26 Sep 2005
Posts: 587
Location: Munich,Germany
Followers: 1

Kudos [?]: 7 [0], given: 0

GMAT Tests User
 [#permalink] New post 11 Nov 2005, 10:24
E it is.
Director
Director
avatar
Joined: 26 Sep 2005
Posts: 587
Location: Munich,Germany
Followers: 1

Kudos [?]: 7 [0], given: 0

GMAT Tests User
 [#permalink] New post 11 Nov 2005, 10:25
e it is
Director
Director
avatar
Joined: 09 Jul 2005
Posts: 595
Followers: 2

Kudos [?]: 19 [0], given: 0

GMAT Tests User
 [#permalink] New post 11 Nov 2005, 11:48
I go with E too. B could be a possible answer, but I think E is better.
Manager
Manager
User avatar
Joined: 05 Nov 2005
Posts: 232
Location: Germany
Followers: 2

Kudos [?]: 6 [0], given: 0

GMAT Tests User
 [#permalink] New post 11 Nov 2005, 12:18
OA is E
Manager
Manager
User avatar
Joined: 05 Nov 2005
Posts: 232
Location: Germany
Followers: 2

Kudos [?]: 6 [0], given: 0

GMAT Tests User
 [#permalink] New post 11 Nov 2005, 12:19
OA is E
Director
Director
User avatar
Joined: 29 Aug 2005
Posts: 503
Followers: 2

Kudos [?]: 6 [0], given: 0

GMAT Tests User
 [#permalink] New post 15 Nov 2005, 04:23
It is E.
I think this is a OG Q.
  [#permalink] 15 Nov 2005, 04:23
    Similar topics Author Replies Last post
Similar
Topics:
Experts publish their posts in the topic A certain manufacturer increased its gross profit on a saxenarahul021 1 27 Nov 2012, 00:23
Experts publish their posts in the topic Unlike the feeding mechanism of most tadpoles, which ingest macjas 6 09 Aug 2012, 21:36
Manufacturers of staplers make the majority of their profit jamifahad 7 06 Sep 2011, 04:34
4 Making the most of your MBA IHateTheGMAT 4 24 Jan 2009, 12:43
1 Experts publish their posts in the topic Manufacturers of mechanical pencils make most of the profit asaf 12 26 Jul 2007, 04:22
Display posts from previous: Sort by

Manufacturers of mechanical pencils make most of the profit

  Question banks Downloads My Bookmarks Reviews Important topics  


GMAT Club MBA Forum Home| About| Privacy Policy| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group and phpBB SEO

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.