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In order to increase its profits, an Italian restaurant in Pastanton

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In order to increase its profits, an Italian restaurant in Pastanton  [#permalink]

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New post Updated on: 21 Mar 2019, 00:47
3
00:00
A
B
C
D
E

Difficulty:

  55% (hard)

Question Stats:

63% (01:51) correct 37% (01:57) wrong based on 255 sessions

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In order to increase its profits, an Italian restaurant in Pastanton placed its advertisement in one of the local newspapers. After several months, the restaurant's management noticed that the number of customers had increased only slightly, and most of them had never seen the advertisement. Therefore, the management proposed to discontinue placing its advertisement in that newspaper.

Knowing which of the following would LEAST help to evaluate the proposal of the restaurant's management?


A. Whether the circulation of the newspaper is expected to increase any time soon.

B. Whether most new customers who came to the restaurant after seeing its advertisement in the newspaper generally made large orders that generated significant profits to the restaurant.

C. Whether most new customers who came to the restaurant after seeing its advertisement in the newspaper were satisfied with the quality of service in the restaurant.

D. Whether there are alternative ways to advertise the restaurant that would cost the same as placing the advertise in the newspaper but would generate more profits to the restaurant.

E. Wheter the cost of the advertisement exceeds additional profits gained on customers who came to the restaurant after seeing the advertisement.


Hi .. In " C " if the customers 're satisfied with the quality of services , isn't it going to help us evaluate whether discontinuing the newspaper is going to be beneficial for the restaurant?Since , the customers 're satisfied with the services , they 're likely to visit the restaurant again ? What am I missing .Please share your thought process ..


OA to follow


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Originally posted by guerrero25 on 17 Apr 2013, 08:22.
Last edited by Bunuel on 21 Mar 2019, 00:47, edited 3 times in total.
Renamed the topic and edited the question.
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Re: In order to increase its profits, an Italian restaurant in Pastanton  [#permalink]

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New post 17 Apr 2013, 08:43
1
A if the circulation will increase chances are that more people will see the advertisement. It's good info
B is very useful info. It the few new costumers made large orders then the campain brought profits to the resturant.
C CORRECT
D is IMO the most important info. It's important to know if there is a better and more efficient way to attract customers
E also very important. If the net-profit is negative then those few customers brought a loss of profits

IMO C. The text says that there are few new customers, and only few of those saw the advertisement. Their satisfaction is not a good base on which decide on the strategy.
Even if they like the food, this campain could bring losses to the resturant, and if you manage this resturant, would you decide to stop a campain that translates into losses? Yes I presume, even if the customers like the food

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Re: In order to increase its profits, an Italian restaurant in Pastanton  [#permalink]

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New post 17 Apr 2013, 09:41
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lets say 100 more people started coming after the advertisement ---> it is stated that most of them had not seen the advertisement ----> so lets say that 60 had not seen ----considering this the manages decides to quit the add -----> now what are the factors that can stop him from doing so
A ----> if the circulation increases then yes his decision cud be wrong !!
B------>it definitely helps to evaluate .if 30 out of 40 customers who came after seeing the advertisement orders more food then yes advertisement is helpful !!
C------>is not affecting the profit generated .its more important that majority of customer coming to the restaurant sud be satisfied with the services
D------>it will help us to evaluate this for if there is way to do the advertisement other than this then we can make a switch
E ---> definitely helps
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Re: In order to increase its profits, an Italian restaurant in Pastanton  [#permalink]

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New post 17 Apr 2013, 09:51
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guerrero25 wrote:
Hi .. In " C " if the customers 're satisfied with the quality of services , isn't it going to help us evaluate whether discontinuing the newspaper is going to be beneficial for the restaurant?Since , the customers 're satisfied with the services , they 're likely to visit the restaurant again ? What am I missing


To answer your question, the future of the newspaper ad has no bearing on whether customers who have already come through the door are satisfied. Once the customers visit the restaurant the first time, the ad has done its job.

If you're strictly evaluating the effectiveness of the ad, all you need to know is if the ad brings in more money than it costs (or if it has the potential to, in the case of A)

Edit: and for the record, my answer is C.
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Re: In order to increase its profits, an Italian restaurant in Pastanton  [#permalink]

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New post 30 Apr 2013, 07:36
B,D,E all talk about profits which the company is concerned abt , hence they cannot be the answer . Between A and C . If A is true then number of customers visiting may increase again increasing profits whereas C if true or not doesnt help ro change profits .
So I believe C is therefore correct
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Re: In order to increase its profits, an Italian restaurant in Pastanton  [#permalink]

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New post 19 Dec 2018, 17:19
In order to increase its profits, an Italian restaurant in Pastanton placed its advertisement in one of the local newspapers. After several months, the restaurant's management noticed that the number of customers had increased only slightly, and most of them had never seen the advertisement. Therefore, the management proposed to discontinue placing its advertisement in that newspaper.

Knowing which of the following would LEAST help to evaluate the proposal of the restaurant's management?

A. Whether the circulation of the newspaper is expected to increase any time soon.
B. Whether most new customers who came to the restaurant after seeing its advertisement in the newspaper generally made large orders that generated significant profits to the restaurant.
C. Whether most new customers who came to the restaurant after seeing its advertisement in the newspaper were satisfied with the quality of service in the restaurant.
D. Whether there are alternative ways to advertise the restaurant that would cost the same as placing the advertise in the newspaper but would generate more profits to the restaurant.
E. Wheter the cost of the advertisement exceeds additional profits gained on customers who came to the restaurant after seeing the advertisement.


Options A, D, E allow us to make a different conclusion after the answer Yes or No
Between B and C C is better, quality has (alomost) nothing to do in this case
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Re: In order to increase its profits, an Italian restaurant in Pastanton   [#permalink] 19 Dec 2018, 17:19
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