Manager: A new machine that can bring down our operational costs by 20

Question

Manager: A new machine that can bring down our operational costs by 20% has recently been launched in the market. Even though it costs much more to train a person to use this machine than the existing machines, and replacing the machines would lead to some loss in production since employees would be involved in training, the company should switch to the new machines because the savings over a year would more than compensate for the additional training costs for existing employees and the costs because of loss of production.
Which of the following, if true, would most strengthen the manager’s position?

A) The employee turnover rate in the company is almost negligible.

B) Few existing employees would have some apprehensions in switching to the new machines.

C) The company can suffer production loss for over a month without reneging on its customer commitments.

D) There is no other machine in the market that can cut operational costs for the company by more than 20%.

E) The quality of the products produced by the new machine will not be higher than the quality of the products produced by the existing machines.

tushar86 · Answer

Confused between A and D...A could be the answer because if turn over rate is high then company will have to spend lot on training new employees, leading again to production loss too!

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satish060290 · Answer

C- since initial production loss won't affect the sales ie customer commitment, hence it is more strengthened.

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tushar86 · Answer

Question asks to strengthen cost saving. If customer commitment is missed, we donot know if it is monetary loss. Further, question doesnot tell us about production loss months for any individual training...it can be some days or some months but we are not sure. Hence, i doubt this option.

Can some expert provide answer with well reasoning.

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satish060290 · Answer

Got it now. It is A since, turnover relates to employee separation from company. If the rate of employee going away from company post this specialized training is negligible, then the manager's position about the change is strengthened. We can verify by negation also. If too many employees leave the company after training, then the argument falls

broall · Answer

A) The employee turnover rate in the company is almost negligible.
 Correct. Although the training cost is lower than the savings over a year, the manager doesn't mention the employee turnover rate a year. If the turnover rate is significantly high, the training cost could be higher than the savings mentioned above so the argument that switching to new machines is totally weakened.

B) Few existing employees would have some apprehensions in switching to the new machines.
 This choice is irrelevant to the argument

C) The company can suffer production loss for over a month without reneging on its customer commitments.
 This choice has little influence on whether that company should switch to the new machines

D) There is no other machine in the market that can cut operational costs for the company by more than 20%.
 This choice is irrelevant to the argument. The manager cares only about the new machine. He doesn't care about other machines in the market.

E) The quality of the products produced by the new machine will not be higher than the quality of the products produced by the existing machines.
 This choice could be good as an assumption to the manager to consider his argument. This choice has no influence on the argument.

arvind910619 · Answer

Hi mikemcgarry

Are we supposed to know technical terms such as turnover rates ?

This question is really tough if you don't know the meaning of turnover rate .
If you know what turnover rate means then the problem is quite simple .

ramblers · Answer

High turnover rate seems irrelevant to me. If the turnover rate is high, you're going to have to train them with or without new machines.

If an employee trained on the old machines leaves, you replace them with a new employee and train them on the new machines. A high turnover rate might even help you flush out employees only trained on old machines.

I picked D because it seemed the least bad. But that's pretty bad too...

arvind910619 · Answer

I am also not sure about this question .
I am waiting for some experts to decode this CR .

aragonn · Answer

Premise : Newly launch machine >>> can bring down cost >>> higher training cost >>>> some loss in production due to employee involved in training. Why this is happening ?

conclusion  : saving over a yr > extra training cost + cost cause loss of production

pre-thinking  : we need to strengthen the conclusion . This can happen when this conclusion stand correct in any situation. one such case is that no extra variable on either side, which we have not thought of, such as some extra cost or some extra loss, or some loss on saving side.

A) The employee turnover rate in the company is almost negligible.   ---- Employee turnover refers to the number or percentage of workers who leave an organization and are replaced by new employees. if this happen then an extra variable is added to the equation which can definetly dismantle the thought process. 
  
B) Few existing employees would have some apprehensions in switching to the new machines. ---- eventually they will or not . may be they will do something else.

C) The company can suffer production loss for over a month without reneging on its customer commitments. ---- hmm ability to honour customer commitments,this will make any impact on any factor in our equation ? it can come under "cost cause loss of production". company knows about its upcoming commitments and that is why this factor is there. this type of loss is already calculated.

D) There is no other machine in the market that can cut operational costs for the company by more than 20%. --- out of scope.

E) The quality of the products produced by the new machine will not be higher than the quality of the products produced by the existing machines. --- not impacting factor.

lostnumber · Answer

One of the given downsides (potential weaknesses) in the argument given is that the cost to train employees on the new machine is much higher. Keep in mind also, that the argument is for REPLACING the old machines with the new, not operating them simultaneously. If I have 100 people trained on the old machines, and I replace the machines with something new, I will have to train 100 people and incur the associated costs. If those people stay in my factor and work til they keel over that is great, because I'll never have to pay any additional training costs. If 50 of those people leave after a year and need to be replaced, I will then need to pay for training for 50 additional people, increasing the overall cost of the replacement.

Now if the cost of training was the same between the old and new machines then this might be an irrelevant fact, but its clearly stated in the prompt that one of the potential drawbacks to the new technology is increased training costs.

VerbalBot · Answer

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Manager: A new machine that can bring down our operational costs by 20

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Manager: A new machine that can bring down our operational costs by 20

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