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Sales of telephones have increased dramatically over the

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Sales of telephones have increased dramatically over the [#permalink] New post 05 Feb 2013, 05:25
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58% (02:16) correct 42% (01:25) wrong based on 99 sessions
Sales of telephones have increased dramatically over the last year. In order to take advantage of this increase, Mammoth Industries plans to expand production of its own model of telephone, while continuing its already very extensive advertising of this product.

Which of the following, if true, provides most support for the view that Mammoth Industries cannot increase its sales of telephones by adopting the plan outlined above?

(A) Although it sells all of the telephones that it produces, Mammoth Industries' share of all telephone sales has declined over the last year.
(B) Mammoth Industries' average inventory of telephones awaiting shipment to retailers has declined slightly over the last year.
(C) Advertising has made the brand name of Mammoth Industries' telephones widely known, but few consumers know that Mammoth Industries owns this brand.
(D) Mammoth Industries' telephone is one of three brands of telephone that have together accounted for the bulk of the last year's increase in sales.
(E) Despite a slight decline in the retail price, sales of Mammoth Industries' telephones have fallen in the last year.


please provide detailed explanations for the answer choices! Thanks
[Reveal] Spoiler: OA

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Re: Sales of telephones have increased dramatically over the [#permalink] New post 05 Feb 2013, 08:10
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I guess the answer is
[Reveal] Spoiler:
E
.

Mammoth Industries plans to expand production of its own model of telephone --- BECAUSE --- Sales of telephones have increased dramatically over the last year and it wants to take advantage of the situation.

We are asked a question as to why they might not be successful in doing so/ why this might not be such a good plan.

(A) Although it sells all of the telephones that it produces, Mammoth Industries' share of all telephone sales has declined over the last year.
If it sells whatever it produces...this means that they are meeting their targets and so might be the case this time too. Doesn't tell us why this is not a good plan. INCORRECT

(B) Mammoth Industries' average inventory of telephones awaiting shipment to retailers has declined slightly over the last year.
If the inventory or stock has declined, it means either the consumption is more or production is less. We are not sure which is he case and hence it doesn't tell us why this is not a good plan. INCORRECT.

(C) Advertising has made the brand name of Mammoth Industries' telephones widely known, but few consumers know that Mammoth Industries owns this brand.
Out of scope. Doesn't tell us why this is not a good plan. INCORRECT.

(D) Mammoth Industries' telephone is one of three brands of telephone that have together accounted for the bulk of the last year's increase in sales.
If they are producing a brand that accounted for the bulk in sales. This might be a good idea. We are hunting for - why this might not be a good idea. INCORRECT.

(E) Despite a slight decline in the retail price, sales of Mammoth Industries' telephones have fallen in the last year.
What ??? They were not able to sell despite of decline in retail price. Then this definitely is not a good plan. CORRECT
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Re: Sales of telephones have increased dramatically over the [#permalink] New post 05 Feb 2013, 07:59
Mammoth Industries
Plan : expand production of its own model of telephone
How? advertising of its product.

Which of the following, if true, provides most support for the view that Mammoth Industries cannot increase its sales of telephones by adopting the plan outlined above?
A : For instance, the information that the company's share of all phones sales has declined COULD be ajusted if the ads are successful but it's not sure whether it can or not
B: irrelevant since company's average inventory of telephones awaiting shipment cannot gives an idea on future sales.
C: If ads has made the brand name widely known and the company have decided to push more ads forward then this could affect consumers or NOT, we cannot know right now SO , Irrelevant..
D: this option actually provides support for the view that the company CAN increase its sales ..
E: Correct because this option tell us that the company had used all the ways to increase the sales ( ads +decline in retail price ) vainly and thus, it cannot increase its sales
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Re: Sales of telephones have increased dramatically over the [#permalink] New post 05 Feb 2013, 08:14
Sales of telephones have increased dramatically over the last year. (In general telephone sales have gone up. General Scope. Indicating what's occurredIn order to take advantage of this increase, Mammoth Industries plans to expand production of its own model of telephone, while continuing its already very extensive advertising of this product.Particular company wants to take advantage of this general trend
Weaken Question type.

Which of the following, if true, provides most support for the view that Mammoth Industries cannot increase its sales of telephones by adopting the plan outlined above?

(A) Although it sells all of the telephones that it produces, Mammoth Industries' share of all telephone sales has declined over the last year. Share of sales declined. That means number of telephones relative to other companies. If we had a pie chart, and it was hypothetically 70%, now it's 50%. However, the pie has expanded, so maybe other companies increased more than it increased.
B) Mammoth Industries' average inventory of telephones awaiting shipment to retailers has declined slightly over the last year.Inventory awaiting shipment is a specific element of its sales, it doesn't say anything about the total amount of telephone sales. So, this is irrelavant
(C) Advertising has made the brand name of Mammoth Industries' telephones widely known, but few consumers know that Mammoth Industries owns this brand. Few consumers know about it, that still doesn't mean that it will fail. We don't know what increased production will do. Overall this choice is neutral because it'd be an assumption to say otherwise.
(D) Mammoth Industries' telephone is one of three brands of telephone that have together accounted for the bulk of the last year's increase in sales.Okay, so it has increased sales. This isn't weakening its argument, if anything, it'd be supporting, but in my opinion, still an assumptionto say it strengthens.
(E) Despite a slight decline in the retail price, sales of Mammoth Industries' telephones have fallen in the last year Perfect. Sales have fallen. So, when the industry as a whole has gone up, the telphone sales have fallen. So what makes us think more production will help that? More production when you have less sales, doesn't increase sales. That simply will increase inventory, and likely unsold items available.
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Re: Sales of telephones have increased dramatically over the [#permalink] New post 23 Apr 2013, 14:35
fozzzy wrote:
Sales of telephones have increased dramatically over the last year. In order to take advantage of this increase, Mammoth Industries plans to expand production of its own model of telephone, while continuing its already very extensive advertising of this product.

Which of the following, if true, provides most support for the view that Mammoth Industries cannot increase its sales of telephones by adopting the plan outlined above?

(A) Although it sells all of the telephones that it produces, Mammoth Industries' share of all telephone sales has declined over the last year.
(B) Mammoth Industries' average inventory of telephones awaiting shipment to retailers has declined slightly over the last year.
(C) Advertising has made the brand name of Mammoth Industries' telephones widely known, but few consumers know that Mammoth Industries owns this brand.
(D) Mammoth Industries' telephone is one of three brands of telephone that have together accounted for the bulk of the last year's increase in sales.
(E) Despite a slight decline in the retail price, sales of Mammoth Industries' telephones have fallen in the last year.


please provide detailed explanations for the answer choices! Thanks


Hi
\I picked A.why A is wrong..........
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Re: Sales of telephones have increased dramatically over the [#permalink] New post 28 Apr 2013, 01:08
mun23 wrote:
fozzzy wrote:
Sales of telephones have increased dramatically over the last year. In order to take advantage of this increase, Mammoth Industries plans to expand production of its own model of telephone, while continuing its already very extensive advertising of this product.

Which of the following, if true, provides most support for the view that Mammoth Industries cannot increase its sales of telephones by adopting the plan outlined above?

(A) Although it sells all of the telephones that it produces, Mammoth Industries' share of all telephone sales has declined over the last year.
(B) Mammoth Industries' average inventory of telephones awaiting shipment to retailers has declined slightly over the last year.
(C) Advertising has made the brand name of Mammoth Industries' telephones widely known, but few consumers know that Mammoth Industries owns this brand.
(D) Mammoth Industries' telephone is one of three brands of telephone that have together accounted for the bulk of the last year's increase in sales.
(E) Despite a slight decline in the retail price, sales of Mammoth Industries' telephones have fallen in the last year.


please provide detailed explanations for the answer choices! Thanks


Hi
\I picked A.why A is wrong..........


Hi mun23
A is a shell game. market share = percentage. Even though Mammnoth Industries's share decrease, but if the total market increases, Mammoth Industry still can sell more telephones.

For example:
Year before last year: total market was 1,000 telephones. MI's share was 50% ==> MI sold 500 telephones.
Last year: total market was 10,000 telephones. MT's share reduced to 20% ==> MI sold 2000 telephones.
Clearly, MI still sold more telephones, although its market share reduced.

Hope it helps.
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Re: Sales of telephones have increased dramatically over the [#permalink] New post 28 Apr 2013, 05:33
even I picked A........ What is the source
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Re: Sales of telephones have increased dramatically over the [#permalink] New post 28 Apr 2013, 10:09
akshayb2 wrote:
even I picked A........ What is the source

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Source is GMAT prep.
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Re: Sales of telephones have increased dramatically over the   [#permalink] 28 Apr 2013, 10:09
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