|
|
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
Track
Your Progress
Practice
Pays
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.
06 Sep 2020, 00:59
Kudos
Bookmarks
B
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
35%
(medium)
Question Stats:
77% (01:29) correct
23%
(01:57)
wrong
based on 43
sessions
History
Date
Time
Result
Not Attempted Yet
A certain retailer gets a shipment of items the day after his inventory drops below y/4 items. Each shipment replenishes the retailer's inventory up to the level y, and it is estimated that the retailer, on average, maintains y/2 in inventory every month throughout the year. The cost of keeping an item in inventory is $0.5 per month. What is the retailer's annual inventory cost.
A. 6y
B. 3y
C. 3y/2
D. y/2
E. y/12
A. 6y
B. 3y
C. 3y/2
D. y/2
E. y/12
06 Sep 2020, 10:38
Kudos
Bookmarks
It's possible the retailer doesn't sell a thing, so the information about replenishing inventory can't logically affect the answer (if it did, there would be different answers in different situations, and thus more than one right answer to the question, which can't happen on the GMAT). If the monthly average is y/2 items, the monthly cost is (0.5)(y/2) = y/4 dollars, and the yearly cost is 12 times that, or $3y.
There seem to be issues with the setup though. It's not clear what is even being averaged, for one thing, or what it means to "maintain y/2 in inventory", nor how the inventory cost is assessed - there's a confusion between units, between days and months. If a unit is only in inventory for part of a month, does the retailer pay for it? That's not at all clear - I could easily take "The cost of keeping an item in inventory is $0.5 per month" to mean that inventory only costs the retailer money when it is "kept" in inventory for a month. And the question says the average is "estimated", but then goes on to ask for an exact answer. So I think there are several issues with the question design.
There seem to be issues with the setup though. It's not clear what is even being averaged, for one thing, or what it means to "maintain y/2 in inventory", nor how the inventory cost is assessed - there's a confusion between units, between days and months. If a unit is only in inventory for part of a month, does the retailer pay for it? That's not at all clear - I could easily take "The cost of keeping an item in inventory is $0.5 per month" to mean that inventory only costs the retailer money when it is "kept" in inventory for a month. And the question says the average is "estimated", but then goes on to ask for an exact answer. So I think there are several issues with the question design.
