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# A company that manufactures heavy industrial equipment

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Senior Manager
Joined: 07 Oct 2003
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A company that manufactures heavy industrial equipment [#permalink]

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08 Jul 2004, 20:35
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Question Stats:

100% (00:00) correct 0% (00:00) wrong based on 3 sessions

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A company that manufactures heavy industrial equipment employs dozens of people in jobs that are considered quite hazardous. The company obeys federal regulations governing workplace safety, and, to comply with new regulations instituted to avoid recently discovered risks from airborne particulate matter, company engineers were required to install extremely expensive air filtering equipment. However, despite the expense of the air filtering equipment, the company's operating costs for the quarter were considerably lower than normal.

Which of the following, if true, most helps to resolve the apparent paradox?

A. Over half the company's expenditures to maintain worker safety go to pay for protective garments; yet only a small percentage of such expenditures go to pay for nose and mouth filters.
B. Prior to the installation of the air equipment, the company had had to prevent damage due to particulate contamination of manufacturing equipment.
C. The company's costs of labor, which make up a large fraction of operating costs, increased during the same period.
D. When the air filtering equipment was installed in the manufacturing facility, the company took the opportunity to upgrade the temperature control equipment.
E. The majority of the company's employees work in the areas of hte plant in which the air filtering equipment was installed.

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GMAT Club Legend
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08 Jul 2004, 21:10
A it is - 2 min.
If air filtering equipment accounts for only a small percentage of overall safety expenses, then the company will not incur any great costs even by buying those "expensive" filters,
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Paul

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Director
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08 Jul 2004, 21:36

A compares spending on two different safety measure, but this doesn't tell whether these two were used prior to the upgrade or after that. What if these equipments were used together before the upgrade? A simply compares the relative cost, nothing else.

B says that prior to upgrade, company used to spend a fortune to maintain the machines (against particulate) in good condition. Now, after upgrade, there won't be particulate matter, thus no maintenance. And in relative cost, company would be saving money.

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GMAT Club Legend
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08 Jul 2004, 21:42
Yes dj, you are right!
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Paul

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08 Jul 2004, 21:55
Got it, B.

A seems to be a distracter.

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Senior Manager
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08 Jul 2004, 21:56
Another vote for B. Explainations same as DJ.
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Giving another SHOT

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Senior Manager
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08 Jul 2004, 22:20
Vow!!!!

I never thought it.

though A not convincing .. i picked it by POE.

but after seeeing the Dj explanation ... it should be B.

this should go to my error log ....

Thanx DJ.

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Senior Manager
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09 Jul 2004, 01:27
(B) is best,

Prior to installation of equipment, company was having losses due to damage of machines, now you save over those damages!!!

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Senior Manager
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09 Jul 2004, 06:11
the OA is B

now can someone take a moment to explain why D is off?

D. When the air filtering equipment was installed in the manufacturing facility, the company took the opportunity to upgrade the temperature control equipment.

I picked D, b/c installing temperature control equipment could bring some costs down. Thanks in advance.

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Director
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09 Jul 2004, 06:37
lastochka wrote:
the OA is B
now can someone take a moment to explain why D is off?

D. When the air filtering equipment was installed in the manufacturing facility, the company took the opportunity to upgrade the temperature control equipment.

I picked D, b/c installing temperature control equipment could bring some costs down. Thanks in advance.

ok, here, the explanation (D's) just go haywire. Goverment regulations ruled to install air-filters to decimate air borne particles, anything beyond air-filters would be out of the scope.

Company took an opportunity to install ACs...good deal, this will help workers calm down their nerves. The main premise talks of the particulate born disease and that is been taken care by new air-filters. Additional information on what company did doesn't help much.

I got what you might be thinking, temperature controlled environment may bring down the machine-temperature and may bring down some breakdown cost, but the information is beyond scope b/c we need to relate air-filter/cost reduction/air borne disease. Hope, this is clear.

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09 Jul 2004, 06:37
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# A company that manufactures heavy industrial equipment

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