Vasquez-Morrell Assurance specializes in insuring : GMAT Critical Reasoning (CR)
Check GMAT Club Decision Tracker for the Latest School Decision Releases http://gmatclub.com/AppTrack

 It is currently 17 Jan 2017, 18:41

### GMAT Club Daily Prep

#### Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

# Events & Promotions

###### Events & Promotions in June
Open Detailed Calendar

# Vasquez-Morrell Assurance specializes in insuring

Author Message
TAGS:

### Hide Tags

Intern
Joined: 10 May 2011
Posts: 32
Followers: 0

Kudos [?]: 1 [0], given: 0

Vasquez-Morrell Assurance specializes in insuring [#permalink]

### Show Tags

28 Jul 2011, 04:58
00:00

Difficulty:

5% (low)

Question Stats:

84% (02:05) correct 16% (01:53) wrong based on 303 sessions

### HideShow timer Statistics

Vasquez-Morrell Assurance specializes in insuring manufacturers. Whenever a policyholder makes a claim, a claims adjuster determines the amount that Vasquez-Morrell is obligated to pay. Vasquez-Morrell is cutting its staff of claims adjusters by 15 percent. To ensure that the company’s ability to handle claims promptly is affected as little as possible by the staff cuts, consultants recommend that Vasquez-Morrell lay off those adjusters who now take longest, on average, to complete work on claims assigned to them.

Which of the following, if true, most seriously calls into question the consultants’ criterion for selecting the staff to be laid off?

(A) If the time that Vasquez-Morrell takes to settle claims increases significantly, it could lose business to other insurers.
(B) Supervisors at Vasquez-Morrell tend to assign the most complex claims to the most capable adjusters.
(C) At Vasquez-Morrell, no insurance payments are made until a claims adjuster has reached a final determination on the claim.
(D) There are no positions at Vasquez-Morrell to which staff currently employed as claims adjusters could be reassigned.
(E) The premiums that Vasquez-Morrell currently charges are no higher than those charged for similar coverage by competitors.

Official Guide 12 Question

 Question: 18 Page: 33 Difficulty: 600

Find All Official Guide Questions

Video Explanations:
[Reveal] Spoiler: OA
If you have any questions
New!
Intern
Joined: 04 Jul 2011
Posts: 24
Followers: 0

Kudos [?]: 14 [0], given: 4

### Show Tags

28 Jul 2011, 05:15
The assurance company needs to layoff workers, but wants to continue to provide high level service. It hires consultants to determine whom to lay off. The consultants say lay off adjusters who take the longest to complete their work on claims.

B is the answer because one can imagine a situation where the most complex claims will take longer than really simple claims. If your complex claims are being handled by your best people and they take longer, then the consultants suggestion will result in you laying off your best people. That's not ideal at all.

C doesn't really call into question the consultants recommendation does it? I mean, look, it says that claims will not be paid until the adjuster makes final determination. That seems to support the idea that hey, this company really needs to get rid of people who take too long on claims right?

Another way to think about it is that you have a group of people working on claims. They all having varying speeds of completing their work. Now a bunch of them are going to be laid off. That means that the remaining workers will have to pick up the work of the laid off workers. In this situation knowing that your remaining workers are going to have to take the work of the laid off workers, would you rather lay off the slow people or the fast people? Well, you'd lay off the slow people right because if you gave the slow people even more work, they'd take even longer to complete the claims whereas if you gave the fast people the slow people's work, they'd be better able to get the claims done quickly.

Thus, C supports the consultants conclusion and is the incorrect answer.
Director
Status: Prep started for the n-th time
Joined: 29 Aug 2010
Posts: 707
Followers: 6

Kudos [?]: 166 [0], given: 37

### Show Tags

28 Jul 2011, 06:38
+1 for B.

Crick
Intern
Joined: 10 May 2011
Posts: 32
Followers: 0

Kudos [?]: 1 [0], given: 0

### Show Tags

28 Jul 2011, 22:37
JohnGaltMBA.. thanks
Senior Manager
Joined: 08 Jun 2010
Posts: 397
Location: United States
Concentration: General Management, Finance
GMAT 1: 680 Q50 V32
Followers: 3

Kudos [?]: 88 [0], given: 13

### Show Tags

29 Jul 2011, 04:39
Simply put in the flow of information, adjuster comes after the claims have been made. This simplifies the entire problem.

Posted from my mobile device
Intern
Joined: 02 Nov 2009
Posts: 21
Schools: ISB
Followers: 0

Kudos [?]: 0 [0], given: 2

### Show Tags

29 Jul 2011, 05:07
Most complex problems take more time to solve . And hence they go to the most capable people . Hence B is the answer .
Manager
Joined: 24 Jun 2011
Posts: 58
Followers: 0

Kudos [?]: 9 [0], given: 6

### Show Tags

29 Jul 2011, 05:24
I think here we have to apply a known fact to reach B. Such as complex claims take more time to solve.
C does not have any effect on the conclusion anyhow.
Manager
Joined: 01 Dec 2008
Posts: 65
Followers: 0

Kudos [?]: 3 [0], given: 2

### Show Tags

29 Jul 2011, 10:08
A claim is paid after the adjuster determines the final amount-> This is not disputed, however, the time taken to reach the decision is being considered in the question. Here C does not fit the bill
Manager
Status: Dream big, work hard, and drink gallons of beer!
Joined: 11 Jun 2011
Posts: 212
Concentration: Finance, General Management
GMAT Date: 10-01-2011
WE: Web Development (Consulting)
Followers: 2

Kudos [?]: 47 [0], given: 33

### Show Tags

29 Jul 2011, 10:54
+1 for B
_________________

If I look absent-minded or insane, I am just living a dream of being successful. If you still wonder why I am like this, you have no idea how success tastes like!

Retired Moderator
Status: 2000 posts! I don't know whether I should feel great or sad about it! LOL
Joined: 04 Oct 2009
Posts: 1712
Location: Peru
Schools: Harvard, Stanford, Wharton, MIT & HKS (Government)
WE 1: Economic research
WE 2: Banking
WE 3: Government: Foreign Trade and SMEs
Followers: 96

Kudos [?]: 909 [0], given: 109

### Show Tags

15 Aug 2011, 07:53
+1 B
_________________

"Life’s battle doesn’t always go to stronger or faster men; but sooner or later the man who wins is the one who thinks he can."

My Integrated Reasoning Logbook / Diary: http://gmatclub.com/forum/my-ir-logbook-diary-133264.html

GMAT Club Premium Membership - big benefits and savings

Director
Joined: 21 Dec 2010
Posts: 649
Followers: 17

Kudos [?]: 219 [0], given: 51

### Show Tags

15 Aug 2011, 21:36
johngaltmba,why would john galt do mba ? wont that be unnecessary for galt ?
_________________

What is of supreme importance in war is to attack the enemy's strategy.

Manager
Joined: 22 Jun 2010
Posts: 212
Followers: 1

Kudos [?]: 110 [0], given: 13

### Show Tags

16 Aug 2011, 00:16
in the first run I went for C too! very tempting 8)
under the pressure...it's tough!
so good a question
Manager
Status: Work hard in silence, let success make the noise
Joined: 25 Nov 2013
Posts: 161
Location: India
Concentration: Finance, General Management
GMAT 1: 540 Q50 V15
GMAT 2: 640 Q50 V27
GPA: 3.11
WE: Consulting (Computer Software)
Followers: 7

Kudos [?]: 67 [0], given: 84

Re: Vasquez-Morrell Assurance specializes in insuring [#permalink]

### Show Tags

12 Jan 2014, 07:09
Only B weakens the consultants’ criterion for selecting the staff to be laid off. Rest all the options do not weaken.
_________________

Sahil Chaudhary
If you find this post helpful, please take a moment to click on the "+1 KUDOS" icon.
My IELTS 7.5 Experience
From 540 to 640...Done with GMAT!!!
http://www.sahilchaudhary007.blogspot.com

Intern
Joined: 25 Feb 2014
Posts: 18
Location: Taiwan
GMAT 1: 660 Q49 V30
GPA: 3.9
Followers: 1

Kudos [?]: 6 [0], given: 12

Re: Vasquez-Morrell Assurance specializes in insuring [#permalink]

### Show Tags

03 Mar 2014, 14:44
I don't see B as a valid answer though. "Complex claims" aren't necessary the most time-consuming, and it would be dodgy to assume it yourself. Unless you arrive B by PoE
_________________

Aiming for a 750. Let me know if this is possible.
Ted Chou

VP
Status: Final Lap Up!!!
Affiliations: NYK Line
Joined: 21 Sep 2012
Posts: 1096
Location: India
GMAT 1: 410 Q35 V11
GMAT 2: 530 Q44 V20
GMAT 3: 630 Q45 V31
GPA: 3.84
WE: Engineering (Transportation)
Followers: 37

Kudos [?]: 526 [0], given: 70

Re: Vasquez-Morrell Assurance specializes in insuring [#permalink]

### Show Tags

04 Mar 2014, 00:15
tedchou12 wrote:
I don't see B as a valid answer though. "Complex claims" aren't necessary the most time-consuming, and it would be dodgy to assume it yourself. Unless you arrive B by PoE

When you compare two equally efficient employee given two sets of different type of task one being tough and other being relatively easier...What do you think who can finish the work faster?

Archit
Manager
Joined: 28 May 2014
Posts: 64
Schools: NTU '16
GMAT 1: 620 Q49 V27
Followers: 0

Kudos [?]: 1 [0], given: 31

Re: Vasquez-Morrell Assurance specializes in insuring [#permalink]

### Show Tags

25 Aug 2014, 08:30
JohnGaltMBA

Shouldn't the best adjusters take little time in assessing the claims?
Re: Vasquez-Morrell Assurance specializes in insuring   [#permalink] 25 Aug 2014, 08:30
Similar topics Replies Last post
Similar
Topics:
2 Vasquez-Morrell Assurance specializes in insuring manufacturers 1 21 Dec 2014, 07:13
3 An insurance company has decided to offer “college insurance.” 2 08 Nov 2014, 05:36
3 Editorial: The premier s economic advisor assures her that 2 26 Jul 2012, 11:10
CR - Health insurance 5 01 May 2009, 07:38
2 CR Insurance policy 10 14 Mar 2008, 14:45
Display posts from previous: Sort by