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

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

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New post 11 May 2018, 00:10
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56% (01:45) correct 44% (02:10) wrong based on 180 sessions

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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.

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Re: In an effort to reduce its parcel delivery costs, an online retailer  [#permalink]

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New post 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?

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Re: In an effort to reduce its parcel delivery costs, an online retailer  [#permalink]

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New post 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.

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Re: In an effort to reduce its parcel delivery costs, an online retailer  [#permalink]

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New post 11 May 2018, 04:09
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Answer should be C.

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.
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Re: In an effort to reduce its parcel delivery costs, an online retailer  [#permalink]

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New post 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.

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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.
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Re: In an effort to reduce its parcel delivery costs, an online retailer  [#permalink]

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New post 11 May 2018, 20:51
Question Type: Paradox

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.

Answer: C
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Re: In an effort to reduce its parcel delivery costs, an online retailer  [#permalink]

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New post 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.
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Please read this: Ultimate GMAT Quantitative Megathread | All You Need for Quant | PLEASE READ AND FOLLOW: 12 Rules for Posting!!!

Resources:
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Collection of Questions:
PS: 1. Tough and Tricky questions; 2. Hard questions; 3. Hard questions part 2; 4. Standard deviation; 5. Tough Problem Solving Questions With Solutions; 6. Probability and Combinations Questions With Solutions; 7 Tough and tricky exponents and roots questions; 8 12 Easy Pieces (or not?); 9 Bakers' Dozen; 10 Algebra set. ,11 Mixed Questions, 12 Fresh Meat

DS: 1. DS tough questions; 2. DS tough questions part 2; 3. DS tough questions part 3; 4. DS Standard deviation; 5. Inequalities; 6. 700+ GMAT Data Sufficiency Questions With Explanations; 7 Tough and tricky exponents and roots questions; 8 The Discreet Charm of the DS; 9 Devil's Dozen!!!; 10 Number Properties set., 11 New DS set.


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Re: In an effort to reduce its parcel delivery costs, an online retailer &nbs [#permalink] 14 May 2018, 02:34
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