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TrueSave is a mail-order company that ships electronic

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Manager
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TrueSave is a mail-order company that ships electronic [#permalink] New post 22 Apr 2012, 02:29
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Question Stats:

83% (02:22) correct 17% (01:50) wrong based on 136 sessions
TrueSave is a mail-order company that ships electronic products from its warehouses to customers worldwide. The company’s shipping manager is proposing that customer orders be packed with newer, more expensive packing materials that virtually eliminate damage during shipping. The manager argues that overall costs would essentially remain unaffected, since the extra cost of the new packing materials roughly equals the current cost of replacing products returned by customers because they arrived in damaged condition.

Which of the following would it be most important to ascertain in determining whether implementing the shipping manager’s proposal would have the argued-for effect on costs?

A. Whether the products shipped by TrueSave are more vulnerable to incurring
damage during shipping than are typical electronic products.
B. Whether electronic products are damaged more frequently in transit than are
most other products shipped by mail-order companies.
C. Whether a sizable proportion of returned items are returned because of damage
already present when those items were packed for shipping.
D. Whether there are cases where customers blame themselves for product
damage that, though present on arrival, isn’t discovered until later.
E. Whether TrueSave continually monitors the performance of the shipping
companies it uses to ship products to its customers

Can someone explain this one?
[Reveal] Spoiler: OA
Manager
Manager
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Joined: 21 Feb 2012
Posts: 116
Location: India
Concentration: Finance, General Management
GMAT 1: 600 Q49 V23
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Kudos [?]: 32 [0], given: 15

Re: CR question [#permalink] New post 22 Apr 2012, 02:38
piyushksharma wrote:
TrueSave is a mail-order company that ships electronic products from its warehouses to customers worldwide. The company’s shipping manager is proposing that customer orders be packed with newer, more expensive packing materials that virtually eliminate damage during shipping. The manager argues that overall costs would essentially remain unaffected, since the extra cost of the new packing materials roughly equals the current cost of replacing products returned by customers because they arrived in damaged condition.

Which of the following would it be most important to ascertain in determining whether implementing the shipping manager’s proposal would have the argued-for effect on costs?

A. Whether the products shipped by TrueSave are more vulnerable to incurring
damage during shipping than are typical electronic products.
B. Whether electronic products are damaged more frequently in transit than are
most other products shipped by mail-order companies.
C. Whether a sizable proportion of returned items are returned because of damage
already present when those items were packed for shipping.
D. Whether there are cases where customers blame themselves for product
damage that, though present on arrival, isn’t discovered until later.
E. Whether TrueSave continually monitors the performance of the shipping
companies it uses to ship products to its customers

Can someone explain this one?


If the items while packing were damaged, and then those items were shipped, still TrueSave has to pay for the damaged item it was going to send to the customers. So it is important to determine that the products/items before packing were damaged or not, if they would have been damaged ones then there is no need to introduce the new packaging material, as the new packaging material would not help in rectifying the damage already caused before packing of the product.
According to me this was the what i got. If someone could tell me if it is correct interpretation of the question.
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Re: CR question [#permalink] New post 23 Apr 2012, 05:27
piyushksharma wrote:
piyushksharma wrote:
TrueSave is a mail-order company that ships electronic products from its warehouses to customers worldwide. The company’s shipping manager is proposing that customer orders be packed with newer, more expensive packing materials that virtually eliminate damage during shipping. The manager argues that overall costs would essentially remain unaffected, since the extra cost of the new packing materials roughly equals the current cost of replacing products returned by customers because they arrived in damaged condition.

Which of the following would it be most important to ascertain in determining whether implementing the shipping manager’s proposal would have the argued-for effect on costs?

A. Whether the products shipped by TrueSave are more vulnerable to incurring
damage during shipping than are typical electronic products.
B. Whether electronic products are damaged more frequently in transit than are
most other products shipped by mail-order companies.
C. Whether a sizable proportion of returned items are returned because of damage
already present when those items were packed for shipping.
D. Whether there are cases where customers blame themselves for product
damage that, though present on arrival, isn’t discovered until later.
E. Whether TrueSave continually monitors the performance of the shipping
companies it uses to ship products to its customers

Can someone explain this one?


If the items while packing were damaged, and then those items were shipped, still TrueSave has to pay for the damaged item it was going to send to the customers. So it is important to determine that the products/items before packing were damaged or not, if they would have been damaged ones then there is no need to introduce the new packaging material, as the new packaging material would not help in rectifying the damage already caused before packing of the product.
According to me this was the what i got. If someone could tell me if it is correct interpretation of the question.


You are correct.
Argument : Cost of extra packaging material = cost of replacing damaged product due to transit.
If the products are damaged before transit, introducing new packaging material is more costly than the old way of packaging. => C
Hope it helps.
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Re: CR question [#permalink] New post 23 Apr 2012, 10:22
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The manager's plan is only viable if it saves the corporation money. The manager believes that better packaging will lead to less broken merchandise and thus less money on replacement. To determine if this plan will work, we have to determine whether there isn't a possibility that, if true, could foil his plan.

A. Whether the products shipped by TrueSave are more vulnerable to incurring
damage during shipping than are typical electronic products.

The focus is on whether the packaging will prevent damaged products and thus replacements. Even if TrueSave packages are more vulnerable to incurring damage, better packaging could prevent damage.

B. Whether electronic products are damaged more frequently in transit than are
most other products shipped by mail-order companies.


We care only about electronic products, and not other products.

C. Whether a sizable proportion of returned items are returned because of damage
already present when those items were packed for shipping. ANSWER


If there was already damage, then no amount of packaging can prevent damage. Think of it this way, even if you pack a broken DVD player in an iron safe (hardly a cost-effective shipping method :)), it will still arrive damaged, and the recipient will very likely ask for a replacement. So, in order to determine how effective the manager's plan will be, we have to determine what perfect of goods were already damaged before packing.

D. Whether there are cases where customers blame themselves for product
damage that, though present on arrival, isn’t discovered until later.


If customer's blame themselves, they are unlikely to return the product.

E. Whether TrueSave continually monitors the performance of the shipping
companies it uses to ship products to its customers.


If a customer asks for a replacement, TrueSave will have to provide it, and thus lose money. Whether the company is monitoring the shipping company is moot if the packaging is flimsy.
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Re: TrueSave is a mail-order company that ships electronic [#permalink] New post 21 Nov 2013, 11:00
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Re: TrueSave is a mail-order company that ships electronic   [#permalink] 21 Nov 2013, 11:00
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