Bunuel wrote:

In an effort to reduce its parcel delivery costs, an online retailer partnered with stores in major cities to allow customers to pick up purchases at stores within one day of placing the order, as opposed to using the retailer’s expedited shipping service. In the year that followed, over 30% of purchases were fulfilled with the in-person pickup option. However, for that same year the retailer’s parcel delivery cost was up more than 10% over the previous year.

Which of the following, if true, best reconciles the discrepancy above?

A. Only certain products were eligible to be picked up at stores.

B. The ability to pick up purchases at stores was inconvenient for customers who did not live in major cities.

C. The retailer fulfilled over 60% more orders than it did the previous year.

D. The average cost of a parcel delivery was 10% higher than it was the previous year.

E. Parcel delivery costs increased year over year for the online retail industry as a whole.

VERITAS PREP OFFICIAL SOLUTION:

In this Explain the Paradox problem, your goal is to reconcile the facts that 1) More than 30% of sales were fulfilled without parcel delivery (compared to 0% the year before) and 2) Parcel delivery costs were still up by 10%.

Think about ways that that could be true. What if:

-The cost of parcel delivery was way up, so they paid a lot more for each delivery, even if there were fewer deliveries total.

-The percentage of sales that required deliveries was down, but the number of sales was so high that the total number of deliveries was way up.

That type of thinking should lead you to answer choices (C) and (D). With (C), the correct answer, note that if overall sales were up over 60% while only about 30% of those sales were picked up in person, that would account for a more than 10% increase in shipping costs (technically the math would be 1.6 * 0.7 = 1.12--> a 60% increase in sales, 70% of which were fulfilled with parcel delivery, means a 12% increase in shipments).

With (D), note that the 10% increase in shipping cost per package doesn't offset the 30% reduction in the number of packages shipped. The general direction of the answer is on the right track (each shipment could have been more expensive) but the numbers don't work.

With (A) and (B), these factors are already factored in to the statistical evidence given. Even if only certain products could be picked up, or the pick-up process were inconvenient for people, you already know that more than 30% of sales were fulfilled that way, so you would expect the cost of fulfilling orders via delivery would still be down. And choice (E) misses the scope: the argument is only about this one company, for which you are given statistics that seem to be incompatible, so the general industry information doesn't change anything.

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