A factory was trying out a new process for producing one of its

Question

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(D) Although some of the factory's managers have been arguing that the product is outdated and ought to be redesigned, the use of the new production process does not involve any changes in the finished product.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.

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.

fameatop · Accepted Answer

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

ChiranjeevSingh · Answer

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.

metallicafan · Answer

+1 C

A - Out of scope: The conclusion is about whether the new process helped to reduce the costs.
B - Out of scope: It doesn't matter how the costs were reduced as long as the new process is the main cause.
C - The costs reduction has taken without using the new process. - Correct
Note: Maybe you could say "but it is not the same product; it is something similar". Yes, you are right. But you must remember that a "Weaken question" doesn't have to destroy totally the conclusion; it can harm the question partially. This is the case.
D - Opposite: This choice supports the conclusion. Other possible factors have not changed; therefore, the new process is the main cause of the reduction costs.
E - Same as in D.

I think I deserve kudos. 8-)

akhil911 · Answer

This is a cause and effect question and once we understand the cause and effect its not too difficult to point out the answer choice.
cause - New process that was introduced.
Effect - Cost savings .

In order to weaken this cause effect relationship we need to either have another cause which could result in the effect or prove that the cause was not correct.

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.
This is n Out of Scope answer choice

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.
Strengthens the conclusion based on the cause

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.
Alternate cause of reduction in costs - correct answer.

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.
Out of scope answer choice.

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
Strengthens the conclusion based on the premise.

Bunuel · Answer

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.

Answer: C.

siddharthaggarwal · Answer

The goal is the reduce the production cost by trying out new process for production. 
Trial showed 15% first reduction.

(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.

It basically says that the new process produces more efficient goods that are not rejected by quality control. Thus, the cost of production is decreased. it's a strengthener.

(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.

Nice! it basically says that their could've been any other reason apart from the new process that led to cost reduction.Eg- maybe govt. reduced the electricity rate for production machines.

(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.

We are not concerned about the demand of the product!

Posted from my mobile device

gmatimothy · Answer

Sneha2021 · Answer

KarishmaB   GMATNinja

(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.

In B, the cost reduction is due to reduction in the number of finished/end products but we actually need to make more products or exact no. of planned products once the process is implemented. So we won't be able to save cost. B is saying there is a particular outcome (less no. of end products made compared to planned) in the "trial process" but this outcome will change when "there is no trail process".

In C, the cost saving for a similar product could be due to change in raw material. The cost savings in a similar product say nothing whether new process led to cost savings. Unless reason for cost saving is same, the conclusion is still believable that new process led to cost savings. It is possible that both old and new process led to cost savings but reason could be different.

Please help me to understand why B is incorrect.

Thanks in advance.

KarishmaB · Answer

Trial with a new process was conducted. There was a 15% reduction in costs. 
Conclusion: The new process did produce a cost savings.

(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.

The reason there was cost saving was the number of products rejected was less. So if 100 were produced and only 2 were rejected and thrown out, the cost price per product became Total Cost Price/98
Normally when 100 products are produced, 10 are faulty and hence discarded. So cost price per usable product (which can be sold) comes out to be Total Cost Price/90 (higher than the trial cost price)
So the new process likely led to better quality control and hence, this option has nothing against the new process being the reason for lower cost.

(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.

Another similar product, made without the new process, also showed same reduction in cost. Then it seems that something else could be the reason for decreased cost, not the new process (e.g. reduced wages for all workers etc). Hence it makes us doubt our conclusion that "the new process" led to decrease in costs. It is still possible that the new process led to decrease in costs but this option does make us take a step back and hence, casts doubt on our conclusion.

Answer (C)

Stanindaw · Answer

Mam, do we need to assume in option C that intial cost of production in both the factory described in the argument and the similar factory is same?

VerbalBot · Answer

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A factory was trying out a new process for producing one of its

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