GMAT Question of the Day - Daily to your Mailbox; hard ones only

 It is currently 15 Oct 2019, 06:51

### GMAT Club Daily Prep

#### Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

# In an effort to reduce its parcel delivery costs, an online retailer

Author Message
TAGS:

### Hide Tags

Math Expert
Joined: 02 Sep 2009
Posts: 58332
In an effort to reduce its parcel delivery costs, an online retailer  [#permalink]

### Show Tags

11 May 2018, 00:10
10
00:00

Difficulty:

55% (hard)

Question Stats:

59% (01:51) correct 41% (01:57) wrong based on 211 sessions

### HideShow timer Statistics

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.

_________________
Intern
Joined: 27 Nov 2016
Posts: 42
Location: India
Schools: ISB '19
GPA: 2.75
Re: In an effort to reduce its parcel delivery costs, an online retailer  [#permalink]

### Show Tags

11 May 2018, 00:19
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.

Option A?

Posted from my mobile device
_________________
Please appreciate with a kudo if my post is helpful to you
Senior Manager
Joined: 14 Feb 2018
Posts: 388
Re: In an effort to reduce its parcel delivery costs, an online retailer  [#permalink]

### Show Tags

11 May 2018, 03:57
A. Only certain products were eligible to be picked up at stores. - OOS

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

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

D. The average cost of a parcel delivery was 10% higher than it was the previous year. - correct. Imo this one because it gives a good reason as to why the costs increased.

E. Parcel delivery costs increased year over year for the online retail industry as a whole. - it talks about the whole industry and for every year. However, the premise neither talks about the whole industry nor does it give any information about the yearly costs.

IMO D.

Sent from my Lenovo K53a48 using GMAT Club Forum mobile app
Manager
Joined: 14 Oct 2017
Posts: 237
GMAT 1: 710 Q44 V41
Re: In an effort to reduce its parcel delivery costs, an online retailer  [#permalink]

### Show Tags

11 May 2018, 04:09
1

If sales increased by 60% the absolute number of deliveries should have increased as well. This increase accounts for the 10% higher delivery costs.
As 30% of the purchases were picked up in person the increase in delivery costs isn't too high in proportion to the overall increase in sales.
_________________
My goal: 700 GMAT score - REACHED | My debrief - first attempt 710 (Q44,V41,IR7)

Manager
Joined: 14 Oct 2017
Posts: 237
GMAT 1: 710 Q44 V41
Re: In an effort to reduce its parcel delivery costs, an online retailer  [#permalink]

### Show Tags

11 May 2018, 04:13
SonalSinha803 wrote:
A. Only certain products were eligible to be picked up at stores. - OOS

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

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

D. The average cost of a parcel delivery was 10% higher than it was the previous year. - correct. Imo this one because it gives a good reason as to why the costs increased.

E. Parcel delivery costs increased year over year for the online retail industry as a whole. - it talks about the whole industry and for every year. However, the premise neither talks about the whole industry nor does it give any information about the yearly costs.

IMO D.

Sent from my Lenovo K53a48 using GMAT Club Forum mobile app

SonalSinha803

We are given that 30% of the orders were picked up in person. Hence, the number of deliveries was reduced. So even if the delivery costs increased by 10% the total delivery costs would be = 100 *1,1 *0,7 = 0,77 = 77% of the the delivery costs of the previous year. Therefore, D can't be the correct answer.
_________________
My goal: 700 GMAT score - REACHED | My debrief - first attempt 710 (Q44,V41,IR7)

Marshall & McDonough Moderator
Joined: 13 Apr 2015
Posts: 1686
Location: India
Re: In an effort to reduce its parcel delivery costs, an online retailer  [#permalink]

### Show Tags

11 May 2018, 20:51

Argument: Although 30% of the purchases were in store pickups, the delivery cost exceeded previous year's cost by 10%

A. Only certain products were eligible to be picked up at stores. - Still, this should have resulted in a decrease in delivery cost, but it did not.

B. The ability to pick up purchases at stores was inconvenient for customers who did not live in major cities. - Even if the rest were able to pick up from the stores, the delivery cost should have decreased.

C. The retailer fulfilled over 60% more orders than it did the previous year. - Correct. Since the number of orders increased by over 60% the overall delivery cost also increased.

D. The average cost of a parcel delivery was 10% higher than it was the previous year. - Even if the average cost increased by 10%, 70% of the purchases were through parcel delivery. Cost should have come down.

E. Parcel delivery costs increased year over year for the online retail industry as a whole. - Out of focus. We are not concerned about the overall online retail industry. The changes that happen in the online retail industry may or many not impact the online retailer in question.

Math Expert
Joined: 02 Sep 2009
Posts: 58332
Re: In an effort to reduce its parcel delivery costs, an online retailer  [#permalink]

### Show Tags

14 May 2018, 02:34
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.
_________________
Non-Human User
Joined: 01 Oct 2013
Posts: 5892
Re: In an effort to reduce its parcel delivery costs, an online retailer  [#permalink]

### Show Tags

13 Sep 2019, 03:53
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
_________________
Re: In an effort to reduce its parcel delivery costs, an online retailer   [#permalink] 13 Sep 2019, 03:53
Display posts from previous: Sort by