An online retailer that makes its deliveries through a private shippin

Question

An online retailer that makes its deliveries through a private shipping company has determined that, unlike before, now it can profitably begin making deliveries seven days a week, not just six days a week. Delivering a given number of shipments within a narrower window of time tends to be more cost effective, because, on average, delivery trucks will be able to exploit economies in their driving routes and will incur lower average shipping costs per dollar of delivered goods per hour. Nevertheless, the retailer expects profits to rise with the change.

Which of the following, if true, provides the best reason for the expectation?

A. Due to trends in retail, the average volume occupied in a delivery truck by a single shipment has increased.

B. Due to a shift in consumer sentiment, the additional purchases that customers will be inclined to make by receiving their items marginally faster will outweigh the loss of savings of spreading shipments over a greater number of days.

C. Due to mismanagement at the shipping company, most of the cost savings made possible by delivering over six days rather than seven are not captured.

D. The expanded delivery timetable will attract new customers to the retailer and it will drive away no customers at all.

E. Due to reorganization at both the shipping company and the retailer, the trucks' delivery routes will have to be redesigned in the near future anyway, so the retailer can make the change in timetable now without incurring any one-time costs related to the change in operations.

Dabhishek · Answer

Due to trends in retail, the average volume occupied in a delivery truck by a single shipment has increased. seems good to believe Due to a shift in consumer sentiment, the additional purchases that customers will be inclined to make by receiving their items marginally faster will outweigh the loss of savings of spreading shipments over a greater number of days. no mention about what type of addt purchases customers will do and cost incurred in the shipping the same Due to mismanagement at the shipping company, most of the cost savings made possible by delivering over six days rather than seven are not captured. opposite/ weaken The expanded delivery timetable will attract new customers to the retailer and it will drive away no customers at all. OFS Due to reorganization at both the shipping company and the retailer, the trucks' delivery routes will have to be redesigned in the near future anyway, so the retailer can make the change in timetable now without incurring any one-time costs related to the change in operations. intimidating, but OFS IMO A plz correct me if wrong and +1 if you like

aditya8062 · Answer

B seems best 
 reasoning : both B and D can explain the profit and honestly in both the options we have to make some ASSUMPTION, which is generally not made in GMAC type question
 B says :  Due to a shift in consumer sentiment, the additional purchases that customers will be inclined to make by receiving their items marginally faster will outweigh the loss of savings of spreading shipments over a greater number of days ------>NOW B is making an assumption that "shipping 7 days a week" will definitely make the shipping "faster" !!. this is not necessary.

similarly D says:  The expanded delivery timetable will attract new customers to the retailer and it will drive away no customers at all. ----->this again is making the assumption that "attracting new customer" WILL LEAD to "increased profit"

honestly both the assumptions are viable and people can argue in pro and against of above mentioned assumption

however B seems more viable as answer because it is explicitly stating that  "Due to a shift in consumer sentiment, the additional purchases that customers will be inclined to make by receiving their items marginally faster will  outweigh the loss of savings of spreading shipments over a greater number of days.  -----> this is not done by D !!

daagh · Answer

Explanation from GMAT FREE, the source

Reading the question: If and when we get confused by this prompt or any prompt, we can start with the simplest part and work from there. We'll use this approach in Reading Comprehension. For example, "exploiting economies in driving routes" may be unclear, but delivering on seven days rather than six is clear. So we start with increased delivery time. That tends to be less cost effective, because of some details about how the deliveries are done, but the company "expects profits to rise with the change."

Creating a filter: We could treat this as an explain question, but here's a little trick: When we have an argument that profits will go up, we can break it into two logical pieces: i) revenues go up and/or ii) costs go down. In this case, the delivery cost is not going down--could the new model bring down some other cost (probably not)? Or increase revenues (more likely)?

We apply the filter, looking for some other cost going down, or revenues going up. Choice (A) doesn't give us that; it's good news for the retailer, but this change has already taken effect, so it's already built into the "before" part of the "before-and-after" comparison that the company is making. Choice (B) gives us what we're looking for: it describes increased revenues, and even revenues that exceed costs. Choice (B) passes the filter. Choice (C) does not give us a rising revenue or lowering cost. Choice (D) is similar to (A), but inferior, because this retailer could have more customers without making more revenue, or they might make a little more revenue but not enough to profit more. Choice (E) basically says there are no one-time costs to the shift, but that doesn't explain why the difference between revenues and costs will increase with the change; it still could be less profitable over time after change on a marginal basis.

Logical proof: if we accept the negation of (B), then consumer purchases will not increase sufficiently to increase profits. That fact would highly damage the argument, so (B) itself, indeed, supports the argument. The correct answer is (B).

Guilio · Answer

The great thing about B is that it touches both sides of the coin, revenues and costs, and even provides us with the final outcome - additional revenues will be greater than additional costs. Couldn't be more obvious, although some other statements would also be tempting (D), but only in the absence of B.

Best,
Jay

Best,
Jay

ravigupta2912 · Answer

This almost sounded like resolve the paradox question

The paradox is that retailer claims improved profitability with seven day delivery whereas in reality if you operate within narrower timelines (less days), you save on shipment costs (since more goods are delivered in lesser trips, hence more volumes per dollar of cost). B resolves this paradox by saying that offering 7 day delivery aka - faster times - would drive consumer sentiment, leading to more purchases (revenue) that would offset the loss of savings from 6 day delivery schedule. No other choice strengthens the argument by resolving this paradox.

PyjamaScientist · Answer

ravigupta2912 
Does not Option D also work as a strenghtener? New customers would come in post the implementation of this plan. Meaning higher revenues. Thus, higher profits.

(I wish Daagh was with us)

ravigupta2912 · Answer

Hello, sure if B was not present, D would have been the answer since it offers a scenario where atleast revenues are increasing. But since we have B, which gives info on both revenue and costs, we got to go with B.

B and D are both strengtheners, sure.

Posted from my mobile device

PyjamaScientist · Answer

ravigupta2912

Due to the language of the question stem, it took me more than 90 seconds to understand completely what it wants to convey, is this question a true representation of what comes in actual GMAT?

ClaireCHEN · Answer

An online retailer that makes its deliveries through a private shipping company has determined that, unlike before, now it can profitably begin making deliveries seven days a week, not just six days a week. Delivering a given number of shipments within a narrower window of time tends to be more cost effective, because, on average, delivery trucks will be able to exploit economies in their driving routes and will incur lower average shipping costs per dollar of delivered goods per hour. Nevertheless, the retailer expects profits to rise with the change.

Which of the following, if true, provides the best reason for the expectation?
 So here we will basically explain why the retailer can reach its target thru extending the service up to seven days, or with the efficiency optimization in delivery route design.

A. Due to trends in retail, the average volume occupied in a delivery truck by a single shipment has increased. -- Volume increase will not explain the success of up to 7ds extension or route design.

B. Due to a shift in consumer sentiment, the additional purchases that customers will be inclined to make by receiving their items marginally faster will outweigh the loss of savings of spreading shipments over a greater number of days.--Economically it explains for the 7 days, keep.

C. Due to mismanagement at the shipping company, most of the cost savings made possible by delivering over six days rather than seven are not captured. --Irrelevant to the mismanagement of shipping company for 6 days, and not stating the advantage of 7 days

D. The expanded delivery timetable will attract new customers to the retailer and it will drive away no customers at all. --It seems to bring a possibility of higher revenue by bringing more customers, keep.

E. Due to reorganization at both the shipping company and the retailer, the trucks' delivery routes will have to be redesigned in the near future anyway, so the retailer can make the change in timetable now without incurring any one-time costs related to the change in operations. --Even if the one-time cost won't change, it doesn't necessarily mean the overall cost won't change so which leads to profitability.

So between B&D, B directly mentioned achieving revenues faster while D didn't mention anything about revenue, so choose B over D.

An online retailer that makes its deliveries through a private shippin

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An online retailer that makes its deliveries through a private shippin

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