Last August the XT chain of gasoline stations had a temporary sales

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,

Conclusion: the promotion was successful as a means of boosting sales.

Here was the first thing that came to my mind: They are comparing sales in aug this time vs sales in aug last year. That's too much of a time gap. What if this year, the revenue has anyway gone up?
Note that the conclusion is based on "increase in total sales". There is no distinction between transactions of less than 10 gallons and more than 10 gallons.

What would help us evaluate this conclusion?

The only relevant options are (A) and (C) so let's look at them.

(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?

This questions whether the overall gasoline revenue has seen arise this time.
- Say combined gasoline sales for all stations this time is 10% more than the previous August. Then most gasoline stations would have seen this 10% rise in August sales. Hence the promotion would have had no impact.
- Say combined gasoline sales for all stations this time is no more than the previous August. Then we can say with more certainty that the promotion has had impact.
Hence how we answer this question affects our conclusion.

(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?

Here is the reason this is not helpful to evaluate. The station is trying to increase its overall revenue - whether it is through 10 gallons sales or fewer gallons sale is immaterial. The overall sales has increased.
When we compare customers who bought 10 or more gallons fewer times compared to earlier when they bought the SAME amount of fuel but by visiting more frequently, it doesn't impact the station. These people are today also buying the same amount of fuel that they were buying a year ago. Whether they did it in small amounts or one big, it doesn't impact the success of the promotion at all. What impacts is whether there are people who were not buying at this station or were buying less total amount in the month before but are now buying higher amount. That is what we need to evaluate. That is what will define the success of the promotion.

Answer (A)
_________________

Hi Suntwin,

I agree - C is tempting. TO be honest it took me a little while to work out why it was wrong

The issue is that even if we have C, we have no evidence for why overall sales went up.

The paragraph tells us that overall sales went up 10% - not that the amount of people buying more than 10 gallons went up.

If it had said '10% more people bought over 10 gallons' - then you would have been correct.

Does that make sense?

Cheers,

James

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.

A actually says: total combined gasoline sales for all gasoline stations. This includes XT and non XT gasoline stations. So, if total combined gasoline sales have increased, then there is reason to believe that this increase was a general trend, and not specifically attributed to promotion.
_________________

To find out if the promotion was successful, we need to proof of their claim. The claim being that: For the month of August, XT experienced a ten percent increase in gasoline sales as compared to sales in August the previous year
Choice A is the only answer choice that compares last August sales to previous August

I think its C
Even if the sales compared to previous year were high how does it tell that campaign didnt play his role.

C shows that is there are customers a who bought.more than 10 gallaons frequently but not upfront then they did irrespective of the campaign.

If they didn't do then clearly campaign helped.
If they did then campaign did not help.

Sent from my GT-N7105 using Tapatalk 2

Why not B?

Say if we have the proof that the total sales of this year was great than total sales of last year. However if the cost of providing free car washes during the promotion > total earning, than the promotion wasn't successful, right?

B is wrong because it is out of scope.
The argument says that there was increase in sales and this increase was because of promotion. Thats it.. You dont need to go into revenues, profits etc.. It is causal argument that is.. X causes Y
So, if you say that other gasoline pumps don't see the similar increase then you could say that the argument is valid, however if it is opposite, then the argument may not likely to be true

Think this way, apple announced a promotion that you ll get data usage free with evry phone you purchased and consequently there was increase in sales. Would you be quick in saying that promtion caused the increase. May be.. May be there are another factors such as cut in production cycles of other companys handsets.. Hence,there are n number of causes that can cause the increase in sales, promotion may or may not help.

Posted from my mobile device

Lets take a math approach.
According to the Passage:
Aug-LY: 100 Sales
Aug-TY: 110 Sales

Did the sales increase? - Yes
Did the sales increase because of free car wash? - Don't know.

Answer Choice - A:
Total sales of ALL ( say 10) gas stations where XT operates. Some could be non-XT
Aug-LY: 1000 Sales
Aug-TY: 5000 Sales
Now XT does not look so good - Does it? :D

-----------
Aug-LY-1000
Aug-TY-1010
Now XT looks good.

So answer choice A evaluates.

What's wrong with E? Question E tells us that whether August sales is higher than average of the year.

E says: Are XT’s gasoline sales in August usually significantly higher than one twelfth of XT’s annual gasoline sales?

The argument is basically comparing the sales in August, in two consecutive years and then concludes that the higher sales in one of the years is attributed to the promotion. E does not, in any way, address this.
_________________

what if we break it down with numbers.

Sales for last year aug at 5 different outlets (1st being XT ) in gallons - 100, 110, 90, 80, 110. Total sales = 490

Sales for this year aug - 110, 100, 95, 85, 100. Total sales = 490

I am still unable to understand how evaluating total sales figures will help us understand effect of promotions ?

Pls help.

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? - Correct. If it is already 10%, the promotion didn't have any impact or if it is significantly less, the promotion did have a impact.

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? - OFS

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? - OFS overall sales is considered.

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? - OFS - Impact on sales is considered

E. Are XT’s gasoline sales in August usually significantly higher than one twelfth of XT’s annual gasoline sales? - OFS - Comparing august sales to last august sales

- Premise: XT chain had a temporary promotion (Fact)
- Premise: there was a 10% increase in sales in that month (Fact)
- Conclusion: the promotion must have caused the increase in sales (Opinion).

- Prethinking: Could there have been other factors that could have caused this 10% increase in sales? Maybe this was a generalized fact in all areas in which XT operates and not a particular situation only for XT.

Answer choice A addresses just this.


At first, this answer choice seemed a little counterintuitive to me. I noticed that Gmat doesn´t like to address a correct answer choice by talking about a different "universe".
What I mean is that if you have an argument that states: "In country X blah blah" and an answer choice that states "The neighbor country Y blah blah", that would probably not be the correct answer choice. Don´t ask me why. It´s just patterns. It´s like the use of "being" in SC.

However, here you need to understand whether the cause offered has caused the effect or whether there is another possible explanation. So you are not actually comparing X to Y or to Z. You are comparing X to the bigger picture (its superset) to check whether a certain phenomenon affected only X or all the group.

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?

WHAT IS THE MAIN CONCERN ? IF SALES THIS YEAR IN AUGUST BROUGHT MORE PROFIT COMPARED TO SALES OF PREVIOUS AUGUST

(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? ( comparision is given between the concerned sales periods keep it.)

(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? (not concerned with car washes cost. out of scope.


(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? ( this one is tricky. but since it talks about customers and ignored comparison between August sales this year and that of previous year hence out of scope. because our main concerni is increase in profit. no such keyword is mentioned here)



(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 issue as in B)



(E) Are XT’s gasoline sales in August usually significantly higher than one twelfth of XT’s annual gasoline sales? (out of scope. wrong comparison.)

Hi VeritasKarishma

Thank you for a comprehensive explanation. In option C you said that amount of fuel is same even though it is bought in lower or higher quantity. In option it is not said that amount remains the same?? Am I going wrong in absorbing the meaning of the option C??

Hey warrior1991,

The "same amount" is implied. When they say "lower quantities but more frequently", you are implying that you make up for lower quantity by visiting more frequently.
_________________

When I see this many incredibly boring words, I
(1) list the factual premises more specifically (I always take notes); and
(2) If I am down to two answers, in those two options I look even more carefully than usual for key words.

• THE PROMPT
Fact #1: Last August the XT chain of gas stations had a temporary sales promotion
Fact #2: Promotion = IF customer bought 10+ gallons of gas, customer got a free car wash
Fact #3: Last August, XT [stations] had a 10% increase in SALES compared to SALES during the previous August
Conclusion: The promotion "evidently" boosted sales

When I reached the conclusion, I went back and circled SALES in my notes.
Questions that involve one issue in business accounting almost always try to sneak in other accounting issues.

What is the issue? What do we not know?

We do not know whether the promotion caused the increase in sales.

Correlation is not causation.
Other things could explain August #2's 10% increase in sales.
Maybe in August #2, the public transportation system broke down so people had to drive more.
Maybe in August #2, an amazing circus was in town and lots of people came from other places to see the circus.

What information would help the most to tell us whether the sales promotion caused the increase in sales?

• Things to keep in mind
-- August vs. August is important
-- we care about one thing: which information pertains to whether the promotion caused the sales increase. All else is distraction.

• OPTIONS


-- I cannot eliminate this answer quickly. I am looking for 4 wrong answers, not one correct answer. KEEP.


Trap. Irrelevant. This answer has something to do with profit and loss. Eliminate.
-- The conclusion asks nothing about whether XT turned a profit. The prompt says nothing about profit.
The issue is: Did the promotion cause the sales increase?


Much too vague.
Wow, this one is bad.

First, nothing in this option indicates that sales increased at all, let alone because of the promotion.
-- if people who bought 10+ gallons would have bought, theoretically, fewer gallons more frequently,
that fact suggests that they would have bought the same total amount of gas.

Second, this data has too much uncertainty.
This data is focused on hypothetical buying patterns that do not show a real-world 10% increase in sales.
The quantity words look tempting. They are too vague to be helpful.

Customers who would have bought lower qualities more frequently sound as though they are customers who did not increased total monthly gas purchase.
lower quantities more frequently = probably the same total amount of gas purchased.

Second, what does ANY customers mean?
Customer buying patterns might have changed, but nothing says that all of them
increased their purchase of total gallons by 10%.

When we see vague quantity words such as any, lower, or more frequently, we should ask: do I know anything specific?
-- What is ANY [customers]? A majority? 100% of them?
-- What are LOWER quantities? A lot lower? A little bit lower? There are thousands of possibilities.
-- What is MORE FREQUENTLY? A few times a week? One time more than usual? Again, thousands of possibilities.

ANY is a key word, as are the other capitalized key words.
We have no actual quantities and no guarantee that we will have comparative quantities.

For those who struggled between A and C, one word in option A really helps ("all"),
and these three words in C really do not help.


Irrelevant. Neither the prompt nor the conclusion mentions costs.
Does this option tell us anything about whether the promotion increased the sales? Nope. Eliminate


Neither the prompt nor the conclusion mentions average sales.
We need an August #2 compared to August #1. Average sales do not matter. August #1 and August #2 matter. Eliminate.

I am left with (A).

Ah. ALL gas stations = XT gas stations plus all OTHER non-XT gas stations

What happened to sales at the other gas stations during August #1 vs. August #2?
-- If other gas stations also experienced a 10% sales increase, then the XT promotion had no effect. Sales increased 10% everywhere.
-- If the other gas stations experienced no increase (no change) in sales, then the promotion almost certainly had an effect. (What else explains why ONLY XT gas stations had a 10% increase in sales?)
-- If the other gas stations experienced a decrease in sales, then the promotion almost certainly had an effect—same as above, but maybe the promotion even tempted customers away from other stations.

Option A would give us an answer we could use to evaluate the issue in the conclusion.

Answer A.
_________________

VeritasKarishma
i need your help on this ,i have a doubt with C:
c says people visted frquently nd bought same quantity but where does it mention they bought in same month of august ,

so if people used to buy more frequently but now due to promotion they bought all in august then promotion did help,no where it i mentioned that more frequently is for same month of august ,they may be buying small quantiites frquently but say 20 percent in august nd 80 in september