Events & Promotions
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11 Dec 2023, 13:34
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Understanding the argument -
Last August the XT chain of gasoline stations had a temporary sales promotion in effect. - Fact
In the promotion, any customer who made a purchase of ten or more gallons of gasoline was entitled to a free car wash. - Fact
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. - Supporting premise and Conclusion.
But wait, what about the sales in July this year? Maybe this year is a year of global turmoil and the oil stations are anyway minting money. So we need to know either the sales for this year so far or the overall industry scenario, which is what option A highlights.
Option Elimination -
(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? - ok
(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? - The argument is talking about the sales/revenues. The profits are not the scope here. 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 bought gasoline at the same station in lower quantities, but more frequently, if the promotion had not been in effect? - If the same people, instead of buying 10 Gallons 5 times, are buying all at once, then overall, there is no sales increase for the station. What will increase the sales for the station? If someone was not buying much and not, they were buying more, or if someone was not buying at all from this station and not buying more than 10 gallons or more. So, at best, this is out of scope.
(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? - Don't relate to the sale. Out of scope.
(E) Are XT’s gasoline sales in August usually significantly higher than one-twelfth of XT’s annual gasoline sales? - We aren't comparing the annual sales. We are comparing last August's sales with the same in August the previous year. Out of scope.
Last August the XT chain of gasoline stations had a temporary sales promotion in effect. - Fact
In the promotion, any customer who made a purchase of ten or more gallons of gasoline was entitled to a free car wash. - Fact
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. - Supporting premise and Conclusion.
But wait, what about the sales in July this year? Maybe this year is a year of global turmoil and the oil stations are anyway minting money. So we need to know either the sales for this year so far or the overall industry scenario, which is what option A highlights.
Option Elimination -
(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? - ok
(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? - The argument is talking about the sales/revenues. The profits are not the scope here. 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 bought gasoline at the same station in lower quantities, but more frequently, if the promotion had not been in effect? - If the same people, instead of buying 10 Gallons 5 times, are buying all at once, then overall, there is no sales increase for the station. What will increase the sales for the station? If someone was not buying much and not, they were buying more, or if someone was not buying at all from this station and not buying more than 10 gallons or more. So, at best, this is out of scope.
(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? - Don't relate to the sale. Out of scope.
(E) Are XT’s gasoline sales in August usually significantly higher than one-twelfth of XT’s annual gasoline sales? - We aren't comparing the annual sales. We are comparing last August's sales with the same in August the previous year. Out of scope.
23 Aug 2024, 04:03
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imhimanshu
Context:
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.
Premises:
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.
We need to evaluate whether the increase in sales this year is due to the promotion or some other factor.
(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 a rise.
If we answer
“Yes” – 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.
“No” – 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 an impact.
The two answers affect the conclusion differently. Hence, this is the correct option.
(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?
We are talking about sales, not profits. So, whether we made overall profits from the promotion is irrelevant.
(C) Were there any customers who bought ten or more gallons at an XT gasoline station during the promotion who would have bought gasoline at the same station in lower quantities, but more frequently, if the promotion had not been in effect?
The most common incorrect answer.
The station is trying to increase its overall revenue - whether it is through 10 gallons sales or fewer gallons sale is irrelevant. 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.
If we answer
“Yes” – there were some customers who bought 10 gallons in a go due to the promotion but would have bought 2 gallons each on 5 visits without promotion. The promotion did not increase sales in their case. They were buying total 10 gallons and are still buying total 10 gallons. Hence the promotion would have had no impact. It doesn’t help in explaining why 10% increase in gasoline sales was seen with the promotion.
“No” – there were no such customers who bought 10 gallons in a go due to the promotion but would have bought 2 gallons each on 5 visits without promotion. It doesn’t help in explaining why 10% increase in gasoline sales was seen with the promotion.
Both answers affect the conclusion in the same way i.e. they have no effect on the conclusion.
(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?
As discussed previously, cost of the promotion is out of scope.
(E) Are XT’s gasoline sales in August usually significantly higher than one twelfth of XT’s annual gasoline sales?
It doesn’t matter how we answer this question. Whether August sales are usually higher than average sales doesn’t matter. We know that this August sales were higher than last August. So the comparison is between the two August months only.
Answer (A)
Discussion on Useful to Evaluate Questions: https://youtu.be/1JtHjH1lWZc
06 Nov 2024, 07:04
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Honestly the question should have made it clearer that the promotion was run in one particular chain or maybe in not all the chains. Then it would have been easier to ans.
