The Maxilux car company's design for its new luxury model, : GMAT Critical Reasoning (CR)
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The Maxilux car company's design for its new luxury model,

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The Maxilux car company's design for its new luxury model, [#permalink]

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New post 30 Oct 2012, 22:15
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The Maxilux car company's design for its new luxury model, the Max 100, included a special design for the tires that was intended to complement the model's image. The winning bid for supplying these tires was submitted by Rubco. Analysts concluded that the bid would only just cover Rubco's costs on the tires, but Rubco executives claim that winning the bid will actually make a profit for the company.

Which of the following, if true, most strongly justifies the claim made by Rubco's executives?

(A) In any Maxilux model, the spare tire is exactly the same make and model as the tires that are mounted on the wheels.

(B) Rubco holds exclusive contracts to supply Maxilux with the tires for a number of other models made by Maxilux.

(C) The production facilities for the Max 100 and those for the tires to be supplied by Rubco are located very near each other.

(D) When people who have purchased a carefully designed luxury automobile need to replace a worn part of it, they almost invariably replace it with a part of exactly the same make and type.

(E) When Maxilux awarded the tire contract to Rubco, the only criterion on which Rubco's bid was clearly ahead of its competitors' bids was price.


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Can someone help me guide through the answer choices for this?

Many thanks.
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Re: The Maxilux car company's design for its new luxury model [#permalink]

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elegan wrote:
The Maxilux car company's design for its new luxury model, the Max 100, included a special design for the tires that was intended to complement the model's image. The winning bid for supplying these tires was submitted by Rubco. Analysts concluded that the bid would only just cover Rubco's costs on the tires, but Rubco executives claim that winning the bid will actually make a profit for the company.

Which of the following, if true, most strongly justifies the claim made by Rubco's executives?

(A) In any Maxilux model, the spare tire is exactly the same make and model as the tires that are mounted on the wheels.

(B) Rubco holds exclusive contracts to supply Maxilux with the tires for a number of other models made by Maxilux.

(C) The production facilities for the Max 100 and those for the tires to be supplied by Rubco are located very near each other.

(D) When people who have purchased a carefully designed luxury automobile need to replace a worn part of it, they almost invariably replace it with a part of exactly the same make and type.

(E) When Maxilux awarded the tire contract to Rubco, the only criterion on which Rubco's bid was clearly ahead of its competitors' bids was price.


-----------------------------
Can someone help me guide through the answer choices for this?

Many thanks.


In this question you have to prove that even though company's bid just covers the Rubco's costs on the tyres, it will eventually lead to profits for the company. Certainly if there are long term profits, then its a good sign for the company.
On looking at the options, only D makes sense in that it explicity states that when people who purchased MAX 100 need to replace a worn part of it such as tyres, people will replace it with the same make and type, leading to huge profits for the company.
Hope that helps.
-s
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Re: The Maxilux car company's design for its new luxury model [#permalink]

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New post 31 Oct 2012, 01:43
Marcab wrote:
elegan wrote:
The Maxilux car company's design for its new luxury model, the Max 100, included a special design for the tires that was intended to complement the model's image. The winning bid for supplying these tires was submitted by Rubco. Analysts concluded that the bid would only just cover Rubco's costs on the tires, but Rubco executives claim that winning the bid will actually make a profit for the company.

Which of the following, if true, most strongly justifies the claim made by Rubco's executives?

(A) In any Maxilux model, the spare tire is exactly the same make and model as the tires that are mounted on the wheels.

(B) Rubco holds exclusive contracts to supply Maxilux with the tires for a number of other models made by Maxilux.

(C) The production facilities for the Max 100 and those for the tires to be supplied by Rubco are located very near each other.

(D) When people who have purchased a carefully designed luxury automobile need to replace a worn part of it, they almost invariably replace it with a part of exactly the same make and type.

(E) When Maxilux awarded the tire contract to Rubco, the only criterion on which Rubco's bid was clearly ahead of its competitors' bids was price.


-----------------------------
Can someone help me guide through the answer choices for this?

Many thanks.


In this question you have to prove that even though company's bid just covers the Rubco's costs on the tyres, it will eventually lead to profits for the company. Certainly if there are long term profits, then its a good sign for the company.
On looking at the options, only D makes sense in that it explicity states that when people who purchased MAX 100 need to replace a worn part of it such as tyres, people will replace it with the same make and type, leading to huge profits for the company.
Hope that helps.
-s


I thought the OA would be between C & D. Shouldn't C win over D because In D (When people who have purchased a carefully designed luxury automobile need to replace a worn part of it, they almost invariably replace it with a part of exactly the same make and type.) the contract was for tyres. This option talks about worn parts and not specific to tyres. So increasing the scope of the argument.
Further Profit also means SP-CP. So in C, which states that the transportation cost to be less (the plants being near) actually says that the CP would be less, which indirectly means more profit...
Please let me know if I am thinking wrong here...
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Re: The Maxilux car company's design for its new luxury model [#permalink]

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New post 31 Oct 2012, 02:53
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davidfrank wrote:
Marcab wrote:
elegan wrote:
The Maxilux car company's design for its new luxury model, the Max 100, included a special design for the tires that was intended to complement the model's image. The winning bid for supplying these tires was submitted by Rubco. Analysts concluded that the bid would only just cover Rubco's costs on the tires, but Rubco executives claim that winning the bid will actually make a profit for the company.

Which of the following, if true, most strongly justifies the claim made by Rubco's executives?

(A) In any Maxilux model, the spare tire is exactly the same make and model as the tires that are mounted on the wheels.

(B) Rubco holds exclusive contracts to supply Maxilux with the tires for a number of other models made by Maxilux.

(C) The production facilities for the Max 100 and those for the tires to be supplied by Rubco are located very near each other.

(D) When people who have purchased a carefully designed luxury automobile need to replace a worn part of it, they almost invariably replace it with a part of exactly the same make and type.

(E) When Maxilux awarded the tire contract to Rubco, the only criterion on which Rubco's bid was clearly ahead of its competitors' bids was price.


-----------------------------
Can someone help me guide through the answer choices for this?

Many thanks.


In this question you have to prove that even though company's bid just covers the Rubco's costs on the tyres, it will eventually lead to profits for the company. Certainly if there are long term profits, then its a good sign for the company.
On looking at the options, only D makes sense in that it explicity states that when people who purchased MAX 100 need to replace a worn part of it such as tyres, people will replace it with the same make and type, leading to huge profits for the company.
Hope that helps.
-s


I thought the OA would be between C & D. Shouldn't C win over D because In D (When people who have purchased a carefully designed luxury automobile need to replace a worn part of it, they almost invariably replace it with a part of exactly the same make and type.) the contract was for tyres. This option talks about worn parts and not specific to tyres. So increasing the scope of the argument.
Further Profit also means SP-CP. So in C, which states that the transportation cost to be less (the plants being near) actually says that the CP would be less, which indirectly means more profit...
Please let me know if I am thinking wrong here...


Hii David.
An example will clear all your doubts regarding C.
The screen of Apple's phone iPhone are manufactured by Samsung. They won the bid in, I guess, 2005. Now had Samsung shifted its production facility to US, do you guarantee that it might have been beneficial. NO.Simply because there are several other factors to be looked such as wages. If you think that it could be compensated by less transportation costs, then you may be assuming that transportation costs are much higher.
IN STRENGTHENING QUESTIONS, THERE IS NO PLACE FOR ASSUMPTIONS. A simple No No.
Now in the same example, just even Samsung just covers its production cost, but whenever there is a need to replace the screen, the people will replace it with the same make and type. So people will stick over to this brand. Now Samsung, even if increases its prices, will certainly rule. Though its my opinion :D
Hope that helps.
-s
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Re: The Maxilux car company's design for its new luxury model [#permalink]

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New post 31 Oct 2012, 07:52
Great Marcab..nice explanation..

i also chose D .. ...:))..
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Re: The Maxilux car company's design for its new luxury model, [#permalink]

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Re: The Maxilux car company's design for its new luxury model,   [#permalink] 08 Aug 2016, 10:32
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