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Maximum: 500
Minimum: 200
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
95%
(hard)
Question Stats:
30% (03:13) correct
70%
(03:40)
wrong
based on 174
sessions
History
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Result
Not Attempted Yet
Source: e-GMAT
A Multi Level Marketing company (MLM) builds its business through sponsorship with the company associates. An associate is rewarded a commission based on how much business is generated in his group i.e. people under him. A new associate joins the business at the level immediately below his/her sponsor associate. The business generated by an associate is termed as 'Individual Points', while total (or sum of ) business generated by the associate's group (including him) is termed as 'Cumulative Points'.
The associate's 'Commission Points' equals 'Cumulative Points' of associate's group less Maximum 'Cumulative Points' generated by any of the associates directly under him. Pat is one such company associate, who has 3 levels of hierarchy under him. Pat's 'level 1' (i.e. directly under Pat) has 2 associates, 'level 2' (associates directly under any of the level 1 associates) has 5 associates, & 'level 3' has 1 associate. In a particular month, Pat and each of his group associates have generated individual business worth 100 points.
Based on the information provided, select the maximum, & minimum possible values for 'Commission Points' for Pat, in the table. Different hierarchical structures of the associates in the group can lead to different values of 'Commission Points'.
Make only two selections, one in each column.
| Maximum | Minimum | |
| 100 | ||
| 200 | ||
| 400 | ||
| 500 | ||
| 600 |
ShowHide Answer
Official Answer
Maximum: 500
Minimum: 200
18 Dec 2012, 15:46
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Maximum 500, Minimum 200. Too many words confused me, and hence was totally thrown out and ended up mixing Commission points and Cumulative points. But took a step back and realized that Commossion Points were to be calculated only for Pat, coz associates' commission points under Pat have no significance.
Anyways, my bet is Max 500 and Min 200. Let me know the OA.
Anyways, my bet is Max 500 and Min 200. Let me know the OA.
18 Dec 2012, 16:06
Kudos
Bookmarks
And the reasoning is as follows:
Total Commission Point For Pat == 900 - (Max Cumulative Point of Level 1 Associates)
So Commission Point For Pat is
1. Maximum when "Max Cumulative Point of Level 1 Associates" is Minimum and
2. viceversa.
So,
1. Max Cumulative Point of Level 1 Associates is Maximum when All the Level 2 and Level 3 Associates are under one Level 1 Associates
So one of the Level 2 Associate Cumulative Point will be 700 and the other one’s cumulative point will be 100. Hence Commission Point for Pat == 900 – 700 = 200.
2. Max Cumulative Point of Level 1 Associates is Minimum when the Level 1 Associates have same Cumulative Point. (Coz a mismatch in Cumulative Points will decrease the Commission Point for Pat).
So the Level 2 Associates have Cumulative Point == 400 each. Hence Commission Point for Pat == 900 – 400 = 500.
Total Commission Point For Pat == 900 - (Max Cumulative Point of Level 1 Associates)
So Commission Point For Pat is
1. Maximum when "Max Cumulative Point of Level 1 Associates" is Minimum and
2. viceversa.
So,
1. Max Cumulative Point of Level 1 Associates is Maximum when All the Level 2 and Level 3 Associates are under one Level 1 Associates
So one of the Level 2 Associate Cumulative Point will be 700 and the other one’s cumulative point will be 100. Hence Commission Point for Pat == 900 – 700 = 200.
2. Max Cumulative Point of Level 1 Associates is Minimum when the Level 1 Associates have same Cumulative Point. (Coz a mismatch in Cumulative Points will decrease the Commission Point for Pat).
So the Level 2 Associates have Cumulative Point == 400 each. Hence Commission Point for Pat == 900 – 400 = 500.
