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# A manufacturer of a certain product can expect that between 0.3 percen

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Math Expert
Joined: 02 Sep 2009
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A manufacturer of a certain product can expect that between 0.3 percen  [#permalink]

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14 Oct 2015, 20:33
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84% (01:44) correct 16% (01:49) wrong based on 1786 sessions

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A manufacturer of a certain product can expect that between 0.3 percent and 0.5 percent of the units manufactured will be defective. If the retail price is $2,500 per unit and the manufacturer offers a full refund for defective units, how much money can the manufacturer expect to need to cover the refunds on 20,000 units? (A) Between$15,000 and $25,000 (B) Between$30,000 and $50,000 (C) Between$60,000 and $100,000 (D) Between$150,000 and $250,000 (E) Between$300,000 and $500,000 Kudos for a correct solution. _________________ ##### Most Helpful Community Reply Verbal Forum Moderator Status: Greatness begins beyond your comfort zone Joined: 08 Dec 2013 Posts: 2445 Location: India Concentration: General Management, Strategy Schools: Kelley '20, ISB '19 GPA: 3.2 WE: Information Technology (Consulting) Re: A manufacturer of a certain product can expect that between 0.3 percen [#permalink] ### Show Tags 14 Oct 2015, 20:56 6 1 2 Number of defective units is between = .3 % of 20000 and .5% of 20000 = 60 and 100 Retail Price per unit = 2500$
Expected price of refund is between = 2500 x 60 and 2500 x 100
=1,50,000 and 2,50,000 dollars
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Manager
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Re: A manufacturer of a certain product can expect that between 0.3 percen  [#permalink]

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15 Oct 2015, 10:09
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Bunuel wrote:
A manufacturer of a certain product can expect that between 0.3 percent and 0.5 percent of the units manufactured will be defective. If the retail price is $2,500 per unit and the manufacturer offers a full refund for defective units, how much money can the manufacturer expect to need to cover the refunds on 20,000 units? (A) Between$15,000 and $25,000 (B) Between$30,000 and $50,000 (C) Between$60,000 and $100,000 (D) Between$150,000 and $250,000 (E) Between$300,000 and $500,000 Kudos for a correct solution. Units are expected to be defective: 0.3/100*20,000 => 0.5/100*20,000: 60 ~ 100 => Between$150,000 and $250,000 Ans: D Intern Joined: 11 Jul 2015 Posts: 17 Location: United States GMAT 1: 650 Q47 V32 GMAT 2: 710 Q46 V41 GPA: 3.4 WE: Supply Chain Management (Aerospace and Defense) Re: A manufacturer of a certain product can expect that between 0.3 percen [#permalink] ### Show Tags 15 Oct 2015, 13:33 2 Tried to use some quick thinking on this one. 1% of 20000 = 200 units .5% = 100 units .01% = 20 units .01 x 3 = 20 x 3 .03% = 60 100 * 2500 = 250000 60*2500= 150000 Ans D Retired Moderator Joined: 29 Oct 2013 Posts: 245 Concentration: Finance GPA: 3.7 WE: Corporate Finance (Retail Banking) Re: A manufacturer of a certain product can expect that between 0.3 percen [#permalink] ### Show Tags 11 Dec 2015, 04:49 (.5/100)*20,000*2,500=250,000. Only D has this as the higher limit. No need to calculate for .3% _________________ Please contact me for super inexpensive quality private tutoring My journey V46 and 750 -> http://gmatclub.com/forum/my-journey-to-46-on-verbal-750overall-171722.html#p1367876 Intern Joined: 01 Feb 2016 Posts: 4 Location: Honduras Concentration: Operations, Economics GPA: 3.3 WE: Supply Chain Management (Transportation) A manufacturer of a certain product can expect that between 0.3 percen [#permalink] ### Show Tags 17 Jun 2016, 14:21 let x be the percent of the defective units 0.3<x<0.5 we can assume that x can be 0.4 since its 0.4 percent this would be $$\frac{0.4}{100}$$ 0.4 percent of the 20,000 units given is the same as: 20,000*$$\frac{0.4}{100}$$= 80 units so, about 80 units of the 20000 given will be defective, hence the manufacturer can expect to need to recover around: 80*2500=$200,000
since 200,000 fits in the $150,000 and$250,000 range.

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Re: A manufacturer of a certain product can expect that between 0.3 percen  [#permalink]

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19 Jun 2016, 01:46
0.3 percent is 3 per thousand. 3 per thousand of 20 thousand is 3 x 20 = 60.

Lower bound for total price of defective units: 60 x 2.5 thousand = 150 thousand.

Thus D is the correct answer choice.
Intern
Joined: 28 Jun 2016
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Re: A manufacturer of a certain product can expect that between 0.3 percen  [#permalink]

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27 Jan 2017, 03:58
If you look at the answer format, you can easily notice that all maximum values are different (also calculating 0.5% will cancel out easier than 0.3%)

Thus maximum refund to expect = 0.5% x 2,500 x 20,000 = 250,000

Hint: 0.5% x 20,000 x 2500 = 0.5 x 20000 x 2500/100 = 10,000 x 25 = 250,000
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Re: A manufacturer of a certain product can expect that between 0.3 percen  [#permalink]

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09 Feb 2017, 19:09
How much money need to cover for refund ?
Number of units = 20,000 units
cost = 2500$/ unit 0.3% of units = 3/1000 x 20,000 = 60 units defective 0.5% of units = 5/1000 x 20,000 = 100 units defective Between 60x2500$ = 150,000$100x2500$ = 250,000$D Target Test Prep Representative Status: Founder & CEO Affiliations: Target Test Prep Joined: 14 Oct 2015 Posts: 11394 Location: United States (CA) Re: A manufacturer of a certain product can expect that between 0.3 percen [#permalink] ### Show Tags 16 Feb 2018, 09:31 Bunuel wrote: A manufacturer of a certain product can expect that between 0.3 percent and 0.5 percent of the units manufactured will be defective. If the retail price is$2,500 per unit and the manufacturer offers a full refund for defective units, how much money can the manufacturer expect to need to cover the refunds on 20,000 units?

(A) Between $15,000 and$25,000
(B) Between $30,000 and$50,000
(C) Between $60,000 and$100,000
(D) Between $150,000 and$250,000
(E) Between $300,000 and$500,000

If at least 0.3 percent of the 20,000 units are defective, then at least 0.3/100 x 20,000 = 60 units will be defective costing 60 x 2,500 = 150,000 dollars.

Since we see that 150,000 is the “low” number and only answer choice D has 150,000 as the low number, answer choice D must be correct.

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A manufacturer of a certain product can expect that between 0.3 percen  [#permalink]

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19 Feb 2018, 08:14
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Bunuel wrote:
A manufacturer of a certain product can expect that between 0.3 percent and 0.5 percent of the units manufactured will be defective. If the retail price is $2,500 per unit and the manufacturer offers a full refund for defective units, how much money can the manufacturer expect to need to cover the refunds on 20,000 units? (A) Between$15,000 and $25,000 (B) Between$30,000 and $50,000 (C) Between$60,000 and $100,000 (D) Between$150,000 and $250,000 (E) Between$300,000 and $500,000 Kudos for a correct solution. ok here is a quick method remove all zeros 2,500 = 25 and 20,000 = 2 total number of units 25*2 = 50 now add remaining number of zeros ( add six zeros) 50, 000, 000 5*3 = 15 and 5*5 = 25 so answer is D VP Joined: 18 Dec 2017 Posts: 1418 Location: United States (KS) GMAT 1: 600 Q46 V27 Re: A manufacturer of a certain product can expect that between 0.3 percen [#permalink] ### Show Tags 04 Nov 2019, 12:54 Bunuel wrote: A manufacturer of a certain product can expect that between 0.3 percent and 0.5 percent of the units manufactured will be defective. If the retail price is$2,500 per unit and the manufacturer offers a full refund for defective units, how much money can the manufacturer expect to need to cover the refunds on 20,000 units?

(A) Between $15,000 and$25,000
(B) Between $30,000 and$50,000
(C) Between $60,000 and$100,000
(D) Between $150,000 and$250,000
(E) Between $300,000 and$500,000

Kudos for a correct solution.

All the upper limits are different (and easier to calculate).

20,000 Units. 1% is 200. 0.5% is 100 units.

Refund is full amount so 100*2500. That's 4 zeros.

Option E.
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Re: A manufacturer of a certain product can expect that between 0.3 percen   [#permalink] 04 Nov 2019, 12:54