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Last August the XT chain

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Manager
Joined: 01 Sep 2016
Posts: 114
Re: Last August the XT chain [#permalink]

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13 Sep 2016, 23:24
Thanks,
Your explanation to A/C is perfect and clear

cssk wrote:
I think I can add my inputs here. First of all, take this for granted that carrying out a promotion can lead to increase in sales but may not result in an immediate increase in profits or returns.

Last August the XT chain of gasoline stations had a temporary sales promotion in effect. In the promotion, any customer who made a purchase of ten or more gallons of gasoline was entitled to a free car wash. For the month of August, XT experienced a ten percent increase in gasoline sales as compared to sales in August the previous year, so evidently the promotion was successful as a means of boosting sales.
In evaluating the argument, it would be most helpful to answer which of the following?
A. In the areas in which XT’s gasoline stations operate, how did total combined gasoline sales for all gasoline stations last August compare with sales for the previous August? Sounds good. If all the gasoline stations including those that did not implement a promotional plan see an increase in sales along with XT chain, then the success cannot be attributed to the promotion. So answer to this question evaluates our conclusion.
B. Was the money that XT earned from the increase in gasoline sales enough to offset the cost of providing free car washes during the promotion? Whether cost of providing free car washes can be offset by the increase in gasoline sales is irrelevent to find whether the increase in sales is actually due to the promotion.
C. Were there any customers who bought ten or more gallons at an XT gasoline station during the promotion who would have or more gallons at an XT gasoline in lower quantities, but more frequently, if the promotion had not been in effect? Trap answer. How the customers bought those quantities, be it in large quantities at a time ot in smaller quantities frequently, is totally useless to identify the effect of a promotion on sales.
D. Did XT or any of its gasoline stations have to pay other businesses to provide the car washes that customers were offered in the promotion? Same as B and C, this choice is irrelevent too.
E. Are XT’s gasoline sales in August usually significantly higher than one twelfth of XT’s annual gasoline sales? The answer yes or no this question would not help evaluate our conclusion.
SVP
Joined: 12 Dec 2016
Posts: 1946
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GMAT 1: 700 Q49 V33
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Re: Last August the XT chain [#permalink]

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03 Jul 2017, 20:54
B is just a strengthener.
C would have been correct if there had been no "but more frequently". Even if that is the case, C is still incorrect because C still cannot show a causal relation between the promotion and the sales, but a correlation; in other word, C is not an assumption in either scenario.
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Re: Last August the XT chain [#permalink]

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07 Jul 2017, 07:46
An excellent question .I took a long time to answer it but still got it wrong .
Agree with OA
The problem with C is that we can not conclusively say that it helped in boosting sales .
Some people may have bought frequently and the amount of gasoline bought might be or might be not greater than the 10 gallons of gasoline .
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Director
Joined: 12 Nov 2016
Posts: 790
Re: Last August the XT chain [#permalink]

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25 Aug 2017, 22:14
This is a very deceptive question- the GMAT wants to bait you into C; however, the issue with C is that it would lead to a conclusion about the performance of XT to other companies- in order to evaluate the efficacy of XT's promotion the more logical comparison would be the sales of gasoline before and after the promotion w/r/t XT which A does.

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Manager
Joined: 02 Nov 2015
Posts: 174
GMAT 1: 640 Q49 V29
Re: Last August the XT chain [#permalink]

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26 Aug 2017, 00:15
Totally stumbled. I chose B but the answer mentioned is A.

Yet to understand..very tough.

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Re: Last August the XT chain   [#permalink] 26 Aug 2017, 00:15

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