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Brand X designs and buils custom sneakers, one sneaker at a

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Brand X designs and buils custom sneakers, one sneaker at a [#permalink]

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New post 04 Aug 2012, 21:27
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Brand X designs and buils custom sneakers, one sneaker at a time. It redently announced plans to sell "The Gold Standard", a sneaker that will cost five times more to manufacture than any other sneaker that has been ever been created.

Which of the following,if it occurred, would cast the most serious doubt on the claim that the The Gold Standard will be profitable?

a) The endorsement of the The Gold Standard by a popular Celebrity.
b) The publication of a report indicating that all previous sneaker lines launched by Brand X have been profitable.
c) A significant increase in the cost of the canvas used to construct the The Gold Standard
d) The introduction of the another new sneaker line by a rival manufacturer.
e) An announcement by Brand X that the Gold Standard will be marketed as an exclusive offering, available only in limited quantities.

My question is-

I know that weaken questions must have Premise as an answer i.e it should provide new information. So, in option C, isn't it true that it is not providing any new information. e.g if a company is saying that its product will cost 5 times more to manufacture, then it must have taken in consideration all other costs be it material costs, labor costs, and in that case canvas costs as well etc..
So, how C weakens the choice. Please explain.
Thanks
[Reveal] Spoiler: OA

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Re: Brand X designs and buils custom sneakers - Weaken [#permalink]

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New post 04 Aug 2012, 21:51
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imhimanshu wrote:
Brand X designs and buils custom sneakers, one sneaker at a time. It redently announced plans to sell "The Gold Standard", a sneaker that will cost five times more to manufacture than any other sneaker that has been ever been created.

Which of the following,if it occurred, would cast the most serious doubt on the claim that the The Gold Standard will be profitable?

a) The endorsement of the The Gold Standard by a popular Celebrity.
b) The publication of a report indicating that all previous sneaker lines launched by Brand X have been profitable.
c) A significant increase in the cost of the canvas used to construct the The Gold Standard
d) The introduction of the another new sneaker line by a rival manufacturer.
e) An announcement by Brand X that the Gold Standard will be marketed as an exclusive offering, available only in limited quantities.

My question is-

I know that weaken questions must have Premise as an answer i.e it should provide new information. So, in option C, isn't it true that it is not providing any new information. e.g if a company is saying that its product will cost 5 times more to manufacture, then it must have taken in consideration all other costs be it material costs, labor costs, and in that case canvas costs as well etc..
So, how C weakens the choice. Please explain.
Thanks



Yes, I too thought for a moment that it was D.
Probably, it's more of a C because it is besides the five times cost in manufacturing, there is another "increase" in cost of canvas... So this bit is new piece of info...
And even in D - it says the intro of new sneaker but we do not know about the customer base of that rival( we cannot assume that rivals needed to be qualified as rivals only if they have a similar customer base - Actually sounds obvious but they can be rivals at a manufacturing level and may not be at selling levels... Just saying).

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Re: Brand X designs and buils custom sneakers - Weaken [#permalink]

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New post 04 Aug 2012, 23:21
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imhimanshu wrote:
Brand X designs and buils custom sneakers, one sneaker at a time. It redently announced plans to sell "The Gold Standard", a sneaker that will cost five times more to manufacture than any other sneaker that has been ever been created.

Which of the following,if it occurred, would cast the most serious doubt on the claim that the The Gold Standard will be profitable?

a) The endorsement of the The Gold Standard by a popular Celebrity.
b) The publication of a report indicating that all previous sneaker lines launched by Brand X have been profitable.
c) A significant increase in the cost of the canvas used to construct the The Gold Standard
d) The introduction of the another new sneaker line by a rival manufacturer.
e) An announcement by Brand X that the Gold Standard will be marketed as an exclusive offering, available only in limited quantities.

My question is-

I know that weaken questions must have Premise as an answer i.e it should provide new information. So, in option C, isn't it true that it is not providing any new information. e.g if a company is saying that its product will cost 5 times more to manufacture, then it must have taken in consideration all other costs be it material costs, labor costs, and in that case canvas costs as well etc..
So, how C weakens the choice. Please explain.
Thanks


Himanshu your concern is valid but if you magnify the premise , it will tell you that the Gold Standard is an exclusive item and manufactured once at a time.A significant increase in the price of raw materials used can increase the product's price even if the manufacturers have planned inventory.

Example:- A sugar cane juice seller buys 100 sugar canes for Rs 1000 so he determines the cost of juice Rs X with the cost of sugar cane and marginal profit.The seller goes back to the market and buys the sugar cane again because he can't hold more sugar cane of his own ( he will buy it from cold storage people etc, here in our question also the manufacturers are making the new Gold Standard on demand , as it is customized and can't be prepared and kept ) Now the seller has found that the price of the sugar cane has increased substantially then he will pay for the increased price but now he will do costing of juice as per the new rates and even if he has the old stock of sugar cane at lower rate because HE HAS TO GO BACK TO THE MARKET and buy sugar canes at increased rates.
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Re: Brand X designs and buils custom sneakers - Weaken [#permalink]

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New post 04 Aug 2012, 23:45
Even I answered it D.
The Gold Standard", a sneaker that will cost five times more to manufacture than any other sneaker that has been ever been created.
The very fact that their is a rival,should effect the profit (Not sure of the extent).
But C gives us a much stronger reason for decrease in profit.

Probably when we come across words like Ever , Only. We blindly choose the alternate reason.

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Re: Brand X designs and buils custom sneakers - Weaken [#permalink]

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New post 05 Aug 2012, 04:00
Well this like most other questions follows a simple rule .. that other options don't do the job either. !
I am myself stuck on one particular option lots of times; i just cant co relate it but the others are way more out of scope so eliminate and don't think much about why it will weaken we don't have to present a case on it.
Remember it is always the best answer not the only answer.

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Re: Brand X designs and buils custom sneakers - Weaken [#permalink]

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New post 05 Aug 2012, 21:14
a) The endorsement of the The Gold Standard by a popular Celebrity. - Formula for success - will make the new product successful - Incorrect
b) The publication of a report indicating that all previous sneaker lines launched by Brand X have been profitable. - Good history will encourage consumers to buy the new product - Incorrect
c) A significant increase in the cost of the canvas used to construct the The Gold Standard - Cost of material would directly affect the company. As input cost increases so does the overall production cost. Hence the profitability decreases - Correct
d) The introduction of the another new sneaker line by a rival manufacturer. - No information on the market penetration and marketing campaign of the rival brand is known. - Neutral stand - Incorrect
e) An announcement by Brand X that the Gold Standard will be marketed as an exclusive offering, available only in limited quantities. - Sense of exclusivity drives consumers to shell money for the brand value - Incorrect

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Re: Brand X designs and buils custom sneakers - Weaken [#permalink]

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New post 05 Aug 2012, 21:37
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imhimanshu wrote:
Brand X designs and buils custom sneakers, one sneaker at a time. It redently announced plans to sell "The Gold Standard", a sneaker that will cost five times more to manufacture than any other sneaker that has been ever been created.

Which of the following,if it occurred, would cast the most serious doubt on the claim that the The Gold Standard will be profitable?

a) The endorsement of the The Gold Standard by a popular Celebrity.
b) The publication of a report indicating that all previous sneaker lines launched by Brand X have been profitable.
c) A significant increase in the cost of the canvas used to construct the The Gold Standard
d) The introduction of the another new sneaker line by a rival manufacturer.
e) An announcement by Brand X that the Gold Standard will be marketed as an exclusive offering, available only in limited quantities.

My question is-

I know that weaken questions must have Premise as an answer i.e it should provide new information. So, in option C, isn't it true that it is not providing any new information. e.g if a company is saying that its product will cost 5 times more to manufacture, then it must have taken in consideration all other costs be it material costs, labor costs, and in that case canvas costs as well etc..
So, how C weakens the choice. Please explain.
Thanks


Focus on what is given and what is asked.

Given: The Gold Standard will cost five times more to manufacture than any other sneaker.
Question: Which of the following, if it occurred, would cast the most serious doubt on the claim that the The Gold Standard will be profitable?

The Gold Standard will cost five times more to manufacture but the manufacturers are going ahead with it because they expect profit. Which of the following, if it occurs (i.e. the situations in the given options have not been taken into account by the manufacturers because they haven't occurred yet), could kill profits?
If the cost of the canvas increases significantly, the cost of manufacture would increase even more than 5 times and then the manufacturers may not see profit.

Answer (C).
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Re: Brand X designs and buils custom sneakers - Weaken [#permalink]

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New post 07 Aug 2012, 04:35
Thanks Karishma for your explanation. I'm able to see my mistake.


VeritasPrepKarishma wrote:
Focus on what is given and what is asked.

Given: The Gold Standard will cost five times more to manufacture than any other sneaker.
Question: Which of the following, if it occurred, would cast the most serious doubt on the claim that the The Gold Standard will be profitable?

The Gold Standard will cost five times more to manufacture but the manufacturers are going ahead with it because they expect profit. Which of the following, if it occurs (i.e. the situations in the given options have not been taken into account by the manufacturers because they haven't occurred yet), could kill profits?
If the cost of the canvas increases significantly, the cost of manufacture would increase even more than 5 times and then the manufacturers may not see profit.

Answer (C).

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Re: Brand X designs and buils custom sneakers, one sneaker at a [#permalink]

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Brand X designs and buils custom sneakers, one sneaker at a [#permalink]

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New post 26 Nov 2017, 18:03
stuck with C and D.
Interestingly, both C and D are common patterns in such gmat questions.
The correct answer is D in many cases. Nevertheless, in this question, C is correct b/c of the key word "manufacture"; in other words, the higher cost is caused by a canvas, not by any profitable factors.

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Brand X designs and buils custom sneakers, one sneaker at a   [#permalink] 26 Nov 2017, 18:03
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