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    Strategies and techniques for approaching featured GMAT topics

Nessus Valley Machinery is trying to decide between manufacturing.

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Nessus Valley Machinery is trying to decide between manufacturing.  [#permalink]

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New post 28 Feb 2018, 18:39
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Difficulty:

  25% (medium)

Question Stats:

78% (01:43) correct 22% (02:27) wrong based on 75 sessions

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Which of the following most logically completes the argument below?
Nessus Valley Machinery is trying to decide between manufacturing screws out of steel or screws out of aluminum. Both types of screw typically cost about the same to produce and they sell at comparable prices. Because one of Nessus Valley's primary customers, an automotive company, is discontinuing the truck they produce that uses steel screws, the market for steel screws, though not for aluminum screws, will be significantly smaller than usual. Therefore, producing screws from aluminum will be more profitable than producing screws from steel, because _ .
A. the smaller-than-usual customer base for steel screws will not be offset by a higher sales price for steel screws
B. an additional production run of steel screws should be planned for when the market returns to normal levels
C. the steel screws Nessus Valley produces are better for use in trucks than their aluminum equivalent
D. aluminum screws can only be used for certain products
E. producing aluminum screws is more profitable than producing screws from other types of metal, such as titanium

source - ready4gmat

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Re: Nessus Valley Machinery is trying to decide between manufacturing.  [#permalink]

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New post 28 Feb 2018, 19:49
1
Need to provide a reason why producing Al screws more profitable than Steel screws provided both bear the same cost & selling prices, plus Steel screws demand is declining.

A. the smaller-than-usual customer base for steel screws will not be offset by a higher sales price for steel screws
Correctly describes as if less Steel would be sold at higher prices it will probably offset Steel profitability
B. an additional production run of steel screws should be planned for when the market returns to normal levels
Out of scope
C. the steel screws Nessus Valley produces are better for use in trucks than their aluminum equivalent
Irrelevant
D. aluminum screws can only be used for certain products
Out of scope
E. producing aluminum screws is more profitable than producing screws from other types of metal, such as titanium
Talks about making screw from titanium. Irrelevant
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Re: Nessus Valley Machinery is trying to decide between manufacturing.  [#permalink]

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New post 28 Feb 2018, 21:43
A bcz leeft steel customer are not so high to make profit.

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Re: Nessus Valley Machinery is trying to decide between manufacturing. &nbs [#permalink] 28 Feb 2018, 21:43
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Nessus Valley Machinery is trying to decide between manufacturing.

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