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03 Oct 2022, 04:22
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Difficulty:
35%
(medium)
Question Stats:
73% (02:02) correct
27%
(02:17)
wrong
based on 399
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In the process of manufacturing drug N, a chromatography column needs to be washed and disinfected using a chemical T after manufacturing each batch. The chemical is then disposed of in the wastewater. To reduce the adverse effect of the chemical T on marine life, a regulation will soon come into effect that will forbid disposal of the chemical T above a certain concentration limit into wastewater. Moreover an additional surcharge will be levied on the price of chemical T to discourage its usage. The management is considering using another replacement chemical L, which is also suitable for washing and disinfecting chromatography columns, to manufacture drug N.
All of the following points may be useful to be considered by the management to decide whether replacing chemical T by chemical L would be financially beneficial EXCEPT:
A. Whether using chemical L instead of chemical T would affect the yield per batch of drug N.
B. Whether the chemical structure of chemical L is similar to that of chemical T.
C. Whether the additional cost for diluting the chemical T below the concentration limit to be stipulated by the regulation is significant.
D. Whether there are any alternative cost effective ways to dispose of chemical T rather than disposing of into wastewater.
E. Whether chemical L would bear additional costs because of similar regulations imposed for chemical T.
Thank you sayantanc2k !
All of the following points may be useful to be considered by the management to decide whether replacing chemical T by chemical L would be financially beneficial EXCEPT:
A. Whether using chemical L instead of chemical T would affect the yield per batch of drug N.
B. Whether the chemical structure of chemical L is similar to that of chemical T.
C. Whether the additional cost for diluting the chemical T below the concentration limit to be stipulated by the regulation is significant.
D. Whether there are any alternative cost effective ways to dispose of chemical T rather than disposing of into wastewater.
E. Whether chemical L would bear additional costs because of similar regulations imposed for chemical T.
Thank you sayantanc2k !
wadhwakaran
Joined: 31 Mar 2022
Last visit: 22 Jul 2025
Posts: 262
Given Kudos: 19
Location: India
Concentration: General Management, International Business
Schools: INSEAD Aug'24 intake Oxford Said'25 Judge '25 Imperial'25 HEC Sep'24 Intake LBS '26 ISB '27
GMAT 1: 700 Q50 V35
GPA: 2.8
Products:
Schools: INSEAD Aug'24 intake Oxford Said'25 Judge '25 Imperial'25 HEC Sep'24 Intake LBS '26 ISB '27
GMAT 1: 700 Q50 V35
Posts: 262
03 Oct 2022, 06:08
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A company manufactures drug N. The process requires the CC to be sanitized in chemical T after manufacturing of each batch.
Thereafter, T is disposed of into Waste Water thereby impacting the marine life. To reduce the impact, the government has decided the following measures:
1. Limit the amount to be disposed off into the waste water by passing a regulation in this regard.
2. Increasing the cost of T by levying an additional surcharge.
The company, therefore, is considering to shift to chemical L for sanitizing the CC.
Now we have to ascertain whether it is financially viable for the company to shift from Chemical T to Chemical L and identify what is irrelevant for the company to consider before shifting from T to L.
A. Whether using chemical L instead of chemical T would affect the yield per batch of drug N. Yes it is important to know whether the yield of N is getting affected because of replacing the chemical. Therefore, cannot be the answer.
B. Whether the chemical structure of chemical L is similar to that of chemical T. I think this is not important as long as we know that L can significantly do the job of disinfecting. Therefore, hold it as of now. Further, if at all L has same structure and is equally harmful for marine life as T is, then from financial perspective company will not be bothered to dispose it off in waste water as long as it is costing less than T.
C. Whether the additional cost for diluting the chemical T below the concentration limit to be stipulated by the regulation is significant. I think it is important to know this because if the cost of T including surcharge and additional expenses for diluting it before disposing of are less than the cost of L, then it makes no sense for the company to switch to L.
D. Whether there are any alternative cost effective ways to dispose of chemical T rather than disposing of into wastewater. I think it is important to know if there are effective ways to dispose of Chemical T than disposing of into waste water, then the company will have to only compare the pricing of the T and L to make a decision.
E. Whether chemical L would bear additional costs because of similar regulations imposed for chemical T. I think it is also important for company to consider before making a shift to L, the entire purpose of shifting would fail if the company has to bear similar expenses on L as it has to bear on T.
Therefore, Option B
Thereafter, T is disposed of into Waste Water thereby impacting the marine life. To reduce the impact, the government has decided the following measures:
1. Limit the amount to be disposed off into the waste water by passing a regulation in this regard.
2. Increasing the cost of T by levying an additional surcharge.
The company, therefore, is considering to shift to chemical L for sanitizing the CC.
Now we have to ascertain whether it is financially viable for the company to shift from Chemical T to Chemical L and identify what is irrelevant for the company to consider before shifting from T to L.
A. Whether using chemical L instead of chemical T would affect the yield per batch of drug N. Yes it is important to know whether the yield of N is getting affected because of replacing the chemical. Therefore, cannot be the answer.
B. Whether the chemical structure of chemical L is similar to that of chemical T. I think this is not important as long as we know that L can significantly do the job of disinfecting. Therefore, hold it as of now. Further, if at all L has same structure and is equally harmful for marine life as T is, then from financial perspective company will not be bothered to dispose it off in waste water as long as it is costing less than T.
C. Whether the additional cost for diluting the chemical T below the concentration limit to be stipulated by the regulation is significant. I think it is important to know this because if the cost of T including surcharge and additional expenses for diluting it before disposing of are less than the cost of L, then it makes no sense for the company to switch to L.
D. Whether there are any alternative cost effective ways to dispose of chemical T rather than disposing of into wastewater. I think it is important to know if there are effective ways to dispose of Chemical T than disposing of into waste water, then the company will have to only compare the pricing of the T and L to make a decision.
E. Whether chemical L would bear additional costs because of similar regulations imposed for chemical T. I think it is also important for company to consider before making a shift to L, the entire purpose of shifting would fail if the company has to bear similar expenses on L as it has to bear on T.
Therefore, Option B
General Discussion
