The owner of a plant nursery experiences frequent stock shortages

The owner of a plant nursery experiences frequent stock shortages and cannot meet consumer demand for the most popular fruit tree species. He expects overall sales at the nursery to increase 30% over the next five years. He predicts an increase in plant inventory of only 10% over that period. Nevertheless, he is confident that this increase is sufficient to meet his customers’ demand and maximise revenue.

Which of the following, if true, provides the strongest grounds for the nursery owner’s confidence?

A. By ordering from different suppliers, the nursery owner can achieve the 10% increase in inventory without sacrificing profits.
B. The nursery owner also plans a 10% increase in his stock of gardening accessories.
C. In the town where the nursery is located, it is the only retail store selling plants.
D. Most of the projected increase in sales will be sales of species other than fruit trees.
E. The 10% increase in the nursery’s inventory can be achieved without an equal increase in the business’s costs.


Cheers ! :punk

The owner of a plant nursery experiences frequent stock shortages and cannot meet consumer demand for the most popular fruit tree species. He expects overall sales at the nursery to increase 30% over the next five years. He predicts an increase in plant inventory of only 10% over that period. Nevertheless, he is confident that this increase is sufficient to meet his customers’ demand and maximise revenue.

Which of the following, if true, provides the strongest grounds for the nursery owner’s confidence?

A. By ordering from different suppliers, the nursery owner can achieve the 10% increase in inventory without sacrificing profits.
B. The nursery owner also plans a 10% increase in his stock of gardening accessories.
C. In the town where the nursery is located, it is the only retail store selling plants.
D. Most of the projected increase in sales will be sales of species other than fruit trees.
E. The 10% increase in the nursery’s inventory can be achieved without an equal increase in the business’s costs.


Cheers !

The owner of a plant nursery experiences frequent stock shortages and cannot meet consumer demand for the most popular fruit tree species. He expects overall sales at the nursery to increase 30% over the next five years. He predicts an increase in plant inventory of only 10% over that period. Nevertheless, he is confident that this increase is sufficient to meet his customers’ demand and maximise revenue.

Which of the following, if true, provides the strongest grounds for the nursery owner’s confidence?

A. By ordering from different suppliers, the nursery owner can achieve the 10% increase in inventory without sacrificing profits.
B. The nursery owner also plans a 10% increase in his stock of gardening accessories.
C. In the town where the nursery is located, it is the only retail store selling plants.
D. Most of the projected increase in sales will be sales of species other than fruit trees.
E. The 10% increase in the nursery’s inventory can be achieved without an equal increase in the business’s costs.

well as far as i can understand a,b,c answers are redundant. Option d as mentioned in manhattan cr is a " no tie to the conclusion "answer. Clearly we have to strengthen the conclusion here. As mentioned in option d most of increased sales will be from other than the fruit plants. Now there is a confusion between revenue and sales. Most of the times we think that revenue = sales, but in business terms revenue = total sales. As mentioned in option d the increased sales will be from other than fruit trees and the conclusion speaks about strengthening the revenues. So clearly we have no idea about the total sales in next five years from the mentioned answer. So no tie to the conclusion.
In option E if i consider the equation
profit = revenue - cost.
Case 1 . not able to meet customer demands
here profit is P1, Revenue is R1 and Cost is C1.
Case 2 : Increased revenues and able to meet customer demands
i am assuming here that this time the seller will see increased profits by the above mentioned conditions
Lets call this profit P2
so P2=R2-C2
according to him the increased inventory of 10 percent will be able to compensate for 30 percent increased sales (((which will contribute to revenue)).
e says the cost C2 remains constant. So clearly R2 has to increase and hence the conclusion is strenghtened

hope it helps

The owner of a plant nursery experiences frequent stock shortages and cannot meet consumer demand for the most popular fruit tree species. He expects overall sales at the nursery to increase 30% over the next five years. He predicts an increase in plant inventory of only 10% over that period. Nevertheless, he is confident that this increase is sufficient to meet his customers’ demand and maximise revenue.

Which of the following, if true, provides the strongest grounds for the nursery owner’s confidence?

A. By ordering from different suppliers, the nursery owner can achieve the 10% increase in inventory without sacrificing profits.
B. The nursery owner also plans a 10% increase in his stock of gardening accessories.
C. In the town where the nursery is located, it is the only retail store selling plants.
D. Most of the projected increase in sales will be sales of species other than fruit trees.
E. The 10% increase in the nursery’s inventory can be achieved without an equal increase in the business’s costs.

well as far as i can understand a,b,c answers are redundant. Option d as mentioned in manhattan cr is a " no tie to the conclusion "answer. Clearly we have to strengthen the conclusion here. As mentioned in option d most of increased sales will be from other than the fruit plants. Now there is a confusion between revenue and sales. Most of the times we think that revenue = sales, but in business terms revenue = total sales. As mentioned in option d the increased sales will be from other than fruit trees and the conclusion speaks about strengthening the revenues. So clearly we have no idea about the total sales in next five years from the mentioned answer. So no tie to the conclusion.
In option E if i consider the equation
profit = revenue - cost.
Case 1 . not able to meet customer demands
here profit is P1, Revenue is R1 and Cost is C1.
Case 2 : Increased revenues and able to meet customer demands
i am assuming here that this time the seller will see increased profits by the above mentioned conditions
Lets call this profit P2
so P2=R2-C2
according to him the increased inventory of 10 percent will be able to compensate for 30 percent increased sales (((which will contribute to revenue)).
e says the cost C2 remains constant. So clearly R2 has to increase and hence the conclusion is strenghtened

hope it helps


Hello,

Thanks for posting your views, but I don't agree with your explanation.

1. Profit maximisation is not equal to revenue maximisation.
P=R-C
We need to maximise R not P. Out of the 3 variables we know only about 1 variable "C". We don't know anything about "R".

2. As per the highlighted part of your comment, we can't be too sure about that since the premise NEVER says that this new 30% increase in demand will be met by this 10% increase in inventory. There is a missing link here.
We just know one thing that Initially the demand for most popular fruit tree is more than the supply. We don't know anything about the increased demand (which particular fruits/plants will have increased demand. THE PREMISE EXPLICITLY STATES THE OVERALL DEMAND.) nor we know anything about the 10% increase in inventory.

Example: The most demanded fruit's demand increases to 30% and the demand for all other plants remains constant. The inventory for other plants increase by 10% but the inventory for most demanded fruit doesn't increase. THEN HOW CAN WE SAY THAT WE MAXIMISED OUR REVENUES. THERE IS STILL SCOPE FOR MAXIMISATION.

Its absolute, that in order to maximise a quantity a threshold has to be reached.

Either you see this question mathematically (as in point 1) or you see this question logically (as in point 2), OPTION "E" WILL NEVER SUFFICE THE ARGUMENT AT HAND.

P.S. We just can't assume anything out of the given information. We need not bring any outside world knowledge into solving the GMAT questions. If we start assuming things, each person will have his own version of assumption and that way we won't be able to reach a solution.

Well lets see the p.s. part is too extreme.
When i read cr bible it mentioned two kinds of assumptions 1. defenders and supporters. Defenders are assumptions that provide bridge and supporters remove inadequacies. For a given argument there can be so many assumptions , may be your assumptions are different than mine. But that doesnt necessarily concedes that any assumption is wrong if it properly bridges the gap between a premise and a conclusion. As far as my explanation is concerned , the part highlighted in which i assumed , i dont think its an outside information . Its a simple assumption i made from the given text in the argument.
About the other highlighted part , you said that the premise never said that ""new 30% increase in demand will be met by this 10% increase in inventory. There is a missing link here""
Well if you read my highlighted text i am just giving that missing link . Ofcourse its never stated (( never a extreme word)) sorry for pointing out but the test prep company i am preparing with , asks me to use extreme words as little as possible till the gmat is over . I am just joining the missing links here. Thats what assumptions are (( missing links )) so
that the conclusion can be achieved . also as mentioned i cannot see ""overall demand"" in the argument .
As far as the other text related to maximization is concerned that"s termed as " REAL WORLD DISTRACTION " errors as mentioned in manhattan cr wrong answers chapter. Still more scope for maximisation that will be outside information or new information or outside assumption according to me.
You mentioned ""Its absolute, that in order to maximise a quantity a threshold has to be reached.""
if i go with that manipulation then lets say that threshold is the profit that is same in both the cases as i have mentioned
now again p=r-c
if p is same in both the cases then as mentioned in option e if costs are constant in case 2 then r will be maximized to achieve that same profit.
Maybe i have explained it or maybe not .

Case 1 . not able to meet customer demands
here profit is P1, Revenue is R1 and Cost is C1. -> If he is unable to meet the demand then the conclusion falls apart, thus weakening the argument
Case 2 : Increased revenues and able to meet customer demands
i am assuming here that this time the seller will see increased profits by the above mentioned conditions -> again i will say we can't assume the increased profits. We don't have any such information. The seller states his conclusion when he says that 10% will be able to meet 30% increase in demand. How can you assume anything about profit from this statement?
Lets call this profit P2
so P2=R2-C2
according to him the increased inventory of 10 percent will be able to compensate for 30 percent increased sales (((which will contribute to revenue)).

e says the cost C2 remains constant "This is the biggest mistake in your statement. Option "E" never saya that the cost remains constatnt. It states that the business costs will not increase with a percentage equal to the percentage of inventory increase. For example if I say the cost of biscuit didn't increase by 20% over the past 3 years, it doesn't mean the cost remained constant. It means it could have increased by any percentage less than 20%". So clearly R2 has to increase and hence the conclusion is strenghtened -> So clearly your explanation has loopholes.

The owner of a plant nursery experiences frequent stock shortages and cannot meet consumer demand for the most popular fruit tree species. He expects overall sales at the nursery to increase 30% over the next five years. He predicts an increase in plant inventory of only 10% over that period. Nevertheless, he is confident that this increase is sufficient to meet his customers’ demand and maximise revenue.

Which of the following, if true, provides the strongest grounds for the nursery owner’s confidence?

A. By ordering from different suppliers, the nursery owner can achieve the 10% increase in inventory without sacrificing profits.
B. The nursery owner also plans a 10% increase in his stock of gardening accessories.
C. In the town where the nursery is located, it is the only retail store selling plants.
D. Most of the projected increase in sales will be sales of species other than fruit trees.
E. The 10% increase in the nursery’s inventory can be achieved without an equal increase in the business’s costs.