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# In the last year, a company has lost a few clients and gained a few. B

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Manager
Joined: 16 May 2016
Posts: 202
Location: India
Concentration: Marketing, Healthcare
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In the last year, a company has lost a few clients and gained a few. B  [#permalink]

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20 Nov 2018, 23:19
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59% (01:38) correct 41% (01:42) wrong based on 204 sessions

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In the last year, a company has lost a few clients and gained a few. But the number of clients lost has been lower than the number of new clients. Also, the average sales for each new client are more than the average sales for each of the other clients. Therefore, it is likely that the company’s average sales per client have been increasing steadily

Which of the following is required for the above argument to hold?

A.Currently, the total number of clients is more than the total number of clients that existed before the company lost some of its clients
B.The average sales for each new client are at least equal to the average sales for each other client
C.Most of the clients lost were already planning to terminate their relationship with the company
D.There has been no decrease in the quality of the services provided by the company since the company lost some of its clients last year
E.The average sales per client lost were not significantly higher than the average sales for each of the other clients

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Senior Manager
Joined: 13 Jan 2018
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Re: In the last year, a company has lost a few clients and gained a few. B  [#permalink]

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20 Nov 2018, 23:45
1
In the last year, a company has lost a few clients and gained a few. But the number of clients lost has been lower than the number of new clients. Also, the average sales for each new client are more than the average sales for each of the other clients. Therefore, it is likely that the company’s average sales per client have been increasing steadily

Which of the following is required for the above argument to hold?

A.Currently, the total number of clients is more than the total number of clients that existed before the company lost some of its clients -- Irrelevant
B.The average sales for each new client are at least equal to the average sales for each other client -- Negating the argument
C.Most of the clients lost were already planning to terminate their relationship with the company -- Irrelevant
D.There has been no decrease in the quality of the services provided by the company since the company lost some of its clients last year -- When there is no decrease why did few clients left? How can the sales per client increase from this information? No answers to these questions. So not sufficient
E.The average sales per client lost were not significantly higher than the average sales for each of the other clients -- Correct
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Intern
Joined: 09 Dec 2017
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Re: In the last year, a company has lost a few clients and gained a few. B  [#permalink]

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28 Nov 2018, 07:08
Quote:
Also, the average sales for each new client are more than the average sales for each of the other clients.

What does "other clients" refer to? All remaining clients, or just the lost ones?
Manager
Joined: 03 Aug 2018
Posts: 69
Location: India
Concentration: Strategy, Operations
GMAT 1: 590 Q45 V26
GPA: 3.5
Re: In the last year, a company has lost a few clients and gained a few. B  [#permalink]

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28 Nov 2018, 09:21
Which of the following is required for the above argument to hold?

A.Currently, the total number of clients is more than the total number of clients that existed before the company lost some of its clients
B.The average sales for each new client are at least equal to the average sales for each other client
C.Most of the clients lost were already planning to terminate their relationship with the company
D.There has been no decrease in the quality of the services provided by the company since the company lost some of its clients last year
E.The average sales per client lost were not significantly higher than the average sales for each of the other clients

Given -

New Clients added > Clients lost.
Avg. sales - new Clients > Avg Sales of retained clients.

Question - Assumption ..

I chose A because with the given information , we are given that avg. sales of new clients is more than retained clients to support and if the total customers are more than before, it should help confirm that avg. sales has been increasing from previous state to new state.

E - Avg. sales per client lost was NOT SIGNIFICANTLY Higher than avg. sales of each other client, I had discarded this choice because it may not be significantly higher but even if avg. sales of lost clients was higher by a small margin, it would have taken the average down with them leaving the company. What if the new clients average even though higher than retained customers, is actually the same as the average sales of lost customer ? - We may not be able to say that' average sales are increasing.

Please can anyone help what am I missing in A vs E ..
Intern
Joined: 15 Nov 2018
Posts: 12
In the last year, a company has lost a few clients and gained a few. B  [#permalink]

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Updated on: 28 Nov 2018, 22:03
Hi Abhinav,

I see where you were trying to go with this. Let's try to break the problem down to its roots real quick. Super elementary style.

So let's say the company was doing \$100 in sales. 5 clients. Average \$20/client. Now the company is slacking, doesn't accept cash all customers have black money, who cares about why the company is losing customers, it just is. Any option that justifies the losing of customers is irrelevant. So it's good that you got rid of those.

Now, what's an average? It's the sum total of all values / #of values

Right?

It's telling us the # of customers being lost is less than # of customers coming in.

So... If, for instance, I had 5 customers (sake of argument they were all the same value) doing \$100 in sales (\$20 each).
(It tells me the average sales of new clients is greater than average sales of EACH OF THE OTHER clients...)

Wait. What?

Read the portion in the bracket above again.

Each of what other clients? What if the dudes who are leaving were like \$80 Of my sales and the other remaining ones are like \$5 or something?

40 + 50 + 2 + 3 + 5 / 5 = \$20

20 + 20 + 20 + 20 + 20 /5 = \$20

So I need to know that not only are the people leaving smaller in number. Sure. Cool. But I also need to know that they don't represent an outsized portion of the total sales.

EDIT: Also, your denominator would definitely be larger (Since your total # of customers is increasing) so your numerator (the Total value of all sales) after the fact, would definitely have to be higher than your total value of sales before.

For instance, Before 20 + 20 + 20 + 20 + 20 = 100/5 = \$20 (Avg Before)

After, 20 + 5 + 5 + 20 + 20 + 20 = 90 / 6 = \$15 (Avg After): Conclusion Broken.

Hence E.

Hope that helped!

PM me if something didn't make sense, excuse the grammatical errors etc. Typing on phone.

Best,
HM

proabhinav wrote:
Which of the following is required for the above argument to hold?

A.Currently, the total number of clients is more than the total number of clients that existed before the company lost some of its clients
B.The average sales for each new client are at least equal to the average sales for each other client
C.Most of the clients lost were already planning to terminate their relationship with the company
D.There has been no decrease in the quality of the services provided by the company since the company lost some of its clients last year
E.The average sales per client lost were not significantly higher than the average sales for each of the other clients

Given -

New Clients added > Clients lost.
Avg. sales - new Clients > Avg Sales of retained clients.

Question - Assumption ..

I chose A because with the given information , we are given that avg. sales of new clients is more than retained clients to support and if the total customers are more than before, it should help confirm that avg. sales has been increasing from previous state to new state.

E - Avg. sales per client lost was NOT SIGNIFICANTLY Higher than avg. sales of each other client, I had discarded this choice because it may not be significantly higher but even if avg. sales of lost clients was higher by a small margin, it would have taken the average down with them leaving the company. What if the new clients average even though higher than retained customers, is actually the same as the average sales of lost customer ? - We may not be able to say that' average sales are increasing.

Please can anyone help what am I missing in A vs E ..

Posted from my mobile device

Originally posted by hmasand on 28 Nov 2018, 09:53.
Last edited by hmasand on 28 Nov 2018, 22:03, edited 1 time in total.
Intern
Joined: 03 Aug 2018
Posts: 5
Re: In the last year, a company has lost a few clients and gained a few. B  [#permalink]

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28 Nov 2018, 19:49
Cbirole wrote:
In the last year, a company has lost a few clients and gained a few. But the number of clients lost has been lower than the number of new clients. Also, the average sales for each new client are more than the average sales for each of the other clients. Therefore, it is likely that the company’s average sales per client have been increasing steadily

Premise:
1. No of Existing Clients Lost < No of New Clients Acquired
2. No of Avg Sales Existing Client < No of Avg Sales New Client

Assumption? -

- Conclusion: Co's avg sales per client increase steadily.

Which of the following is required for the above argument to hold?

A.Currently, the total number of clients is more than the total number of clients that existed before the company lost some of its clients
- inference

B.The average sales for each new client are at least equal to the average sales for each other client
- inference

C.Most of the clients lost were already planning to terminate their relationship with the company
- irrelevant

D.There has been no decrease in the quality of the services provided by the company since the company lost some of its clients last year
- Correct

E.The average sales per client lost were not significantly higher than the average sales for each of the other clients

-irrelevant

Posted from my mobile device
Re: In the last year, a company has lost a few clients and gained a few. B   [#permalink] 28 Nov 2018, 19:49
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