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

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Re: Last August the XT chain of gasoline stations had a temporary sales  [#permalink]

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New post 05 Nov 2019, 16:41
As pointed out by others already-

A helps evaluate the effectiveness of the campaign as if other sales increased in similar fashion then there might by an alternate cause for the stated increase in XT's sales, but if other sales did not increase then its likely that the marketing campaign was effective.

C can be eliminated by recalling that total sales increased...no matter the composition. Whether a customer bought 3-3-3-3 increments of gasoline or 12 in one go the total sales need to have increased, so mathematically we can't have a situation in which the smaller incremental sales exceed bigger gasoline purchases without the bigger purchases leading to a net 10% increase on last year's sales overall.
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Re: Last August the XT chain of gasoline stations had a temporary sales  [#permalink]

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New post 26 Nov 2019, 06:30
VeritasKarishma wrote:
imhimanshu wrote:
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?

(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?

(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?

(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?

(E) Are XT’s gasoline sales in August usually significantly higher than one twelfth of XT’s annual gasoline 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)

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
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Re: Last August the XT chain of gasoline stations had a temporary sales  [#permalink]

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New post 26 Nov 2019, 22:30
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vanam52923 wrote:
VeritasKarishma wrote:
imhimanshu wrote:
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?

(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?

(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?

(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?

(E) Are XT’s gasoline sales in August usually significantly higher than one twelfth of XT’s annual gasoline 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)

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


The entire argument is about last August.
Last August there was a temporary sales promotion.
Last Aug, XT experienced a 10% increase in gasoline sales compared to previous Aug.

So the only time frame that we are checking is last Aug and previous Aug.
In last Aug, the promotion happened and sales increased by 10%.

But does this mean that the promotion was successful? What if in last July, the sales were 20% more than the sales of previous July? What if in last Sept, the sales were 12% higher than the sales of previous Sept and so on? What we need to see is whether this year, anyway sales were higher than previous year or whether the promotion actually had impact.

Whether people bought fuel in small quantities or a large quantity at a time is irrelevant to the revenue - as long as they are buying the same total quantity. What the station wants to encourage is for people to buy more total quantity. If the promotion pulls customers from other stations, then it would be successful.
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Re: Last August the XT chain of gasoline stations had a temporary sales   [#permalink] 26 Nov 2019, 22:30

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