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Hi,

I saw you asked this question about 20 days ago and there has been no response so far, so I just wanna share some thoughts. Hope this helps.

Q3: The passage suggests which of the following about divided demand among a growing number of SKU’s?

--> Look for key words "divided demand among a growing number of SKU’s" at the end of the passage, and read related sentences (especially the last 3 sentences). Now we understand that "divided demand among a growing number of SKU’s" is the second side effect of "frequent introductions of new products"

A. It has increased the average lifetime of products.
--> This option brings information in another part (the first side effect) then put it in a relation with the second side effect. Wrong! There is no such a relationship between these two effects. Also, the option also distorts the first side effect, because, as mentioned in the passage, the average lifetime of products "decreased", rather than "increased".

B. It has resulted from retailer’s attempts to predict demand more accurately and avoid both understocks and overstocks.
--> If there is a causal relationship here, it is "divided demand among a growing number of SKU’s" that led to "retailer’s attempts to predict demand more accurately and avoid.....", rather than came from (resulted from) retailer's attempts. Therefore, (B) is wrong.

C. It has decreased the use of flexible manufacturing by companies.
--> It is true that "divided demand among a growing number of SKU’s" is a negative impact of "flexible manufacturing". However, it is nowhere is the passage we can conclude that this negative effect has decreased the use of this type of manufacturing. Another wrong choice.

D. It has not increased the expense of keeping inventory of certain products.
--> Similar to (A), choice (D) just twisted the information by bringing information about the first side effect (expense of keeping inventory of certain products) to put in a relationship with the second side effect. Wrong!

E. It has not prevented companies from predicting aggregate demand with some certainty.
--> Yes, this is exactly what is mentioned at the end of the passage - "Even though manufacturers and retailers can forecast aggregate demand with some certainty, forecasting accurately how that demand will be distributed among the many SKU’s they sell is difficult."

Q4: According to the passage, which of the following has led to growth in the number of new products introduced in the United States each year?

Well if you read the passage carefully enough in initial reading, you may quickly spot rightly the sentence mentioning the cause of of "growth in the number of new products introduced in the United States each year". It is quite at the middle of the passage ".....and since flexible manufacturing has enabled companies to 24 produce, cost-effectively, small quantities of goods. This type of manufacturing has greatly increased the number of new products introduced annually in the United States.". There you are, the correct answer is pretty clear now. But we still need to eliminate incorrect answer choices.

A. Reduced average lifetime of products
--> Wrong! This a problematic effect, rather than the cause, of frequent introduction of new products.

B. Increased ability to forecast aggregate demand
--> Wrong. It is mentioned in the passage that "manufacturers and retailers can forecast aggregate demand with some certainty", but this inherent ability has nothing to do with frequency of new products' introduction.

C. More cost-effective ways of keeping inventory for products
--> Wrong. Similar to choice (A), "keeping inventory for products" is just mentioned as an impact, not the cause, of frequent introduction of new products.

D. Cost-effective production of small quantities of goods
--> Exactly!

E. Increased ability to divide demand among a number of SKU’s and to forecast how that demand will be distributed among those SKU’.
--> Wrong. First of all, "the ability to forecast how that demand will be distributed among those SKU’" is an inherent difficulty, and is totally not related to frequent introduction of new products.