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VP
Joined: 26 Apr 2004
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Most large retail stores hold sales in the month of January. [#permalink]
 16 Feb 2005, 03:51
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0% (00:00) correct
 0% (00:00) wrong based on 0 sessions
Most large retail stores hold sales in the month of January. The original idea of price reduction campaigns in January became popular when it was realized that sales of products would generally slow down following the Christmas rush, were it not for some incentive. The lack of demand could be solved by the simple solution of reducing prices.
There is now an increasing tendency among major department stores in large urban centers to have their "January sales" begin before Christmas, some time before the end of the calendar year. The idea behind this trend is to endeavor to sell the maximum amount of stock at a profit, even if that may not be at the maximum profit.
Which of the following conclusions cannot be drawn from the above?
(A)The incidence of "early" January sales results in the lower holdings of stocks with corollary of lower stock holding costs.
(B)Demand is a function of price' as you lower price, demand increases.
(C)Major stores seem to think it makes sense to have the January sales campaigns pre-CHristmas.
(D)It is becoming less popular to start the January sales in the New Year.
(E)The major department stores do not worry as much about profit maximization as they do abut sales maximization
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SVP
Joined: 30 Sep 2004
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Location: Germany
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A) !
because we dont know when and how the store will increase its stocks we cannot conclude that the costs will be lower because it could buy new products in jan or in feb
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GMAT Club Legend
Joined: 07 Jul 2004
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(A)The incidence of "early" January sales results in the lower holdings of stocks with corollary of lower stock holding costs.
(B)Demand is a function of price' as you lower price, demand increases. ---> Explicitly implied
(C)Major stores seem to think it makes sense to have the January sales campaigns pre-CHristmas. --> Mentioned in passage
(D)It is becoming less popular to start the January sales in the New Year. ---> Implied by increasing tendency
(E)The major department stores do not worry as much about profit maximization as they do abut sales maximization ---> Mentioned in passage
I pick (A) after going through B,C,D,E. (process of elimination). This is because I do not understand the word corollary. But since now I've picked an answer....
corollary: something that naturally follows : RESULT b : something that incidentally or naturally accompanies or parallels (from merriam-webster online)
Based on the meaning, I can phrase (A) as a cause and effect statement:
Incidence of early Jan sales results in lower stockpile which in turn results in lower stock holding costs
We're not sure how stock holding cost vary with the stock on hold. It's neither implied nor stated in the passage. So I'll stick with (A).
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Director
Joined: 05 Jan 2005
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POE led me to A as well.
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Director
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between (A) and (D).. I will also pick (A).
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Senior Manager
Joined: 25 Oct 2004
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A??
Stuck between A and D but chose A over D
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