Events & Promotions
|
|
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.
Nov 2007:30 AM PST
-08:30 AM PST
Learn what truly sets the UC Riverside MBA apart and how it helps in your professional growth
Nov 2211:00 AM IST
-01:00 PM IST
Do RC/MSR passages scare you? e-GMAT is conducting a masterclass to help you learn – Learn effective reading strategies Tackle difficult RC & MSR with confidence Excel in timed test environment- Nov 23
11:00 AM IST
-01:00 PM IST
Attend this free GMAT Algebra Webinar and learn how to master the most challenging Inequalities and Absolute Value problems with ease. 
Nov 2510:00 AM EST
-11:00 AM EST
Prefer video-based learning? The Target Test Prep OnDemand course is a one-of-a-kind video masterclass featuring 400 hours of lecture-style teaching by Scott Woodbury-Stewart, founder of Target Test Prep and one of the most accomplished GMAT instructors.
Updated on: 16 Jan 2019, 00:18
Originally posted by garimavyas on 12 May 2011, 08:35.
Last edited by Bunuel on 16 Jan 2019, 00:18, edited 1 time in total.
Last edited by Bunuel on 16 Jan 2019, 00:18, edited 1 time in total.
Renamed the topic and edited the question.
Kudos
Bookmarks
C
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
55%
(hard)
Question Stats:
67% (02:07) correct
33%
(02:18)
wrong
based on 6890
sessions
History
Date
Time
Result
Not Attempted Yet
A factory was trying out a new process for producing one of its products, with the goal of reducing production costs. A trial production run using the new process showed a fifteen percent reduction in costs compared with past performance using the standard process. The production managers therefore concluded that the new process did produce a cost savings.
Which of the following, if true, casts most doubt on the production managers' conclusion?
(A) In the cost reduction project that eventually led to the trial of the new process, production managers had initially been seeking cost reductions of fifty percent.
(B) Analysis of the trial of the new process showed that the cost reduction during the trial was entirely attributable to a reduction in the number of finished products rejected by quality control.
(C) While the trial was being conducted, production costs at the factory for a similar product, produced without benefit of the new process, also showed a fifteen percent reduction.
(D) Although some of the factory's managers have been arguing that the product is outdated and ought to be redesigned, the use of the new production process does not involve any changes in the finished product.
(E) Since the new process differs from the standard process only in the way in which the stages of production are organized and ordered, the cost of the materials used in the product is the same in both processes.
Which of the following, if true, casts most doubt on the production managers' conclusion?
(A) In the cost reduction project that eventually led to the trial of the new process, production managers had initially been seeking cost reductions of fifty percent.
(B) Analysis of the trial of the new process showed that the cost reduction during the trial was entirely attributable to a reduction in the number of finished products rejected by quality control.
(C) While the trial was being conducted, production costs at the factory for a similar product, produced without benefit of the new process, also showed a fifteen percent reduction.
(D) Although some of the factory's managers have been arguing that the product is outdated and ought to be redesigned, the use of the new production process does not involve any changes in the finished product.
(E) Since the new process differs from the standard process only in the way in which the stages of production are organized and ordered, the cost of the materials used in the product is the same in both processes.
The managers concluded that the new process produced a cost savings on the basis of a trial run of the process in which costs were 15 percent lower than they had been previously. You are asked to identify something that casts doubt on their conclusion.
Choice C is the best answer. If production costs at the factory fell for a similar product that was produced without using the new process, it is more doubtful that the observed production cost reductions achieved during the trial run were actually produced by the new process.
Choice A is incorrect; the fact that the managers had hoped for cost reduction of fifty percent does not cast any doubt on their conclusion that the new process had produced at least some savings.
Choice B is incorrect since finding the source of the cost savings in the trial shows that the savings were no mere accident and so reinforces the managers' conclusion.
Choices D and E are incorrect since by emphasizing that certain aspects of the product — its design and raw materials — were the same in the standard process and the new process, these two answer choices support, rather than cast doubt on, the conclusion that the process itself produced the savings.
Choice C is the best answer. If production costs at the factory fell for a similar product that was produced without using the new process, it is more doubtful that the observed production cost reductions achieved during the trial run were actually produced by the new process.
Choice A is incorrect; the fact that the managers had hoped for cost reduction of fifty percent does not cast any doubt on their conclusion that the new process had produced at least some savings.
Choice B is incorrect since finding the source of the cost savings in the trial shows that the savings were no mere accident and so reinforces the managers' conclusion.
Choices D and E are incorrect since by emphasizing that certain aspects of the product — its design and raw materials — were the same in the standard process and the new process, these two answer choices support, rather than cast doubt on, the conclusion that the process itself produced the savings.
13 Jun 2013, 20:27
Kudos
Bookmarks
A factory was trying out a new process for producing one of its products, with the goal of reducing production costs. A trial production run using the new process showed a fifteen percent reduction in costs compared with past performance using the standard process. The production managers therefore concluded that the new process did produce a cost savings.
Which of the following, if true, casts most doubt on the production managers' conclusion? - Conclusion is highlighted in Red Color
A. In the cost reduction project that eventually led to the trial of the new process, production managers had initially been seeking cost reductions of fifty percent.- Close answers but incorrect because we don't want to compare the effectiveness of new process based on expectations
B. Analysis of the trial of the new process showed that the cost reduction during the trial was entirely attributable to a reduction in the number of finished products rejected by quality control.- Typical Shell game option. It just states how new process reduced the production costs.
C. While the trial was being conducted, production costs at the factory for a similar product, produced without benefit of the new process, also showed a fifteen percent reduction.- This statement conclusive weakens the argument by stating that new process was not the cause of reduced production cost. It was something else that cause the reduction in production cost. Correct
D. Although some of the factory's managers have been arguing that the product is outdated and ought to be redesigned, the use of the new production process does not involve any changes in the finished product. - OFS
E. Since the new process differs from the standard process only in the way in which the stages of production are organized and ordered, the cost of the materials used in the product is the same in both processes. - This statement strengthens the conclusion by adding one more info. Incorrect
Hope this helps many.
Fame
Which of the following, if true, casts most doubt on the production managers' conclusion? - Conclusion is highlighted in Red Color
A. In the cost reduction project that eventually led to the trial of the new process, production managers had initially been seeking cost reductions of fifty percent.- Close answers but incorrect because we don't want to compare the effectiveness of new process based on expectations
B. Analysis of the trial of the new process showed that the cost reduction during the trial was entirely attributable to a reduction in the number of finished products rejected by quality control.- Typical Shell game option. It just states how new process reduced the production costs.
C. While the trial was being conducted, production costs at the factory for a similar product, produced without benefit of the new process, also showed a fifteen percent reduction.- This statement conclusive weakens the argument by stating that new process was not the cause of reduced production cost. It was something else that cause the reduction in production cost. Correct
D. Although some of the factory's managers have been arguing that the product is outdated and ought to be redesigned, the use of the new production process does not involve any changes in the finished product. - OFS
E. Since the new process differs from the standard process only in the way in which the stages of production are organized and ordered, the cost of the materials used in the product is the same in both processes. - This statement strengthens the conclusion by adding one more info. Incorrect
Hope this helps many.
Fame
ChiranjeevSingh
Expert
Tutor
Expert reply
28 Feb 2022, 01:00
Kudos
Bookmarks
garimavyas
People who select option B, my question to you is:
Can a process of production reduce production costs by reducing the number of defective products?
The answer is Yes. Let's say that the production of a batch of 100 products costs Rs 900, and out of these 100 products, 10 are rejected by the quality control. In this case, the production cost of 90 products (100 -10 rejected) is Rs 900 i.e. Rs 10 per product. If a new process reduces the number of defective products to, let's say, ZERO, the production cost of 100 products would be Rs 900 i.e. Rs 9 per product. Thus, the production costs can be brought down simply by reducing the number of defective products.
Similarly, a process of production can reduce production costs by reducing the amount of paint used to paint the products. There can be numerous ways a production process can reduce production costs.
Option B just mentions one way the new production process reduced the cost. That's fine. How the new production process reduces the costs DOES NOT MATTER.
The reason many mark option B is that they think "Oh! The quality control standards have changed. That's why we're rejecting fewer products. That's why our production costs have come down. Not because of the new process. This option, thus, weakens."
However - and it's a big HOWEVER - nowhere it is mentioned that the quality control standards have changed. If option B had stated so, then it'd be correct. However, it doesn't say that. That the quality control standards have changed is entirely your IMAGINATION. Option B just says that fewer products are rejected by the quality control with the new process. Fewer rejections could be entirely due to the new process.
Now, you may be wondering why you IMAGINED that the quality control standards have changed. The reason is simply narrow thinking. For example:
If I say that black people are caught much more frequently than white people by the police for traffic violations, many of us become absolutely sure that the police is biased. That's narrow thinking. The other possibility is that black people are violating traffic rules much more often than white people. That's why they are caught much more frequently.
By narrow thinking, I mean that when multiple possibilities exist, you are entertaining just one.
