“Our House” restaurant is eliminating table-service

Question

“Our House” restaurant is eliminating table-service from its casual dining restaurant in favor of prepared dinner boxes. The restaurant already fills every available seat during its operating hours, and the change to a dinner-box style will not reduce the available seats. Nonetheless, the restaurant's management expects revenue to increase as a result of the switch to the prepared dinner boxes without any concurrent change in revenue per customer or operating hours.
 
Which of the following, if true, provides the best reason for the expectation?

(A) One of the dinner boxes takes up less storage space than the space taken up by one of the large dishes typically used when serving table-service customers

(B) Diners eating out of a dinner box typically do not linger over dinner as long as diners who are served via standard table-service.

(C) Since the restaurant will eliminate table service for only part of the restaurant, it can continue to accommodate customers who do not wish to eat out of prepared 
dinner boxes.

(D) Few diners are likely to avoid the restaurant because of the new dinner-box style.

(E) The restaurant eliminating table-service would otherwise have to hire new waitors and waitresses at a greater expense due to new city regulations on wage

Original Source: Practice Pill Platform

pqhai · Accepted Answer

ANALYZE THE STIMULUS:

"Our house" restaurant's new strategy is that it wants the   customer turnover ratio is high  . The reasons behind that are:
(1) Customers   WILL SPEND LESS TIME   on having dinner boxes than on table-service.
(2) The more customers it serves, the more revenue it gets.

Fact:  "Our House” restaurant is eliminating table-service from its casual dining restaurant in favor of prepared dinner boxes. 
 Fact:  The restaurant already fills every available seat during its operating hours, and the change to a dinner-box style will  NOT reduce the available seats and operating hours . 
 Conclusion:  The restaurant's management expects  revenue to increase  as a result of the switch to the prepared dinner boxes.
 
Which of the following, if true, provides the best reason for the expectation?

ANALYZE EACH ANSWER:

(A) One of the dinner boxes takes up less storage space than the space taken up by one of the large dishes typically used when serving table-service customers
 Wrong.  Out of scope. Nothing about "storage space".

(B) Diners eating out of a dinner box typically do not linger over dinner as long as diners who are served via standard table-service.
  Correct.   This is exactly what the management wants. It wants to increase the number of customers having dinner at the restaurant. If those who have dinner box spend time as much as do people who have table-service, the strategy will fail (Because the number of customer does not increase).

(C) Since the restaurant will eliminate table service for only part of the restaurant, it can continue to accommodate customers who do not wish to eat out of prepared dinner boxes.
 Wrong.  Out of scope. The argument does not say the restaurant eliminate table service for only part....

(D) Few diners are likely to avoid the restaurant because of the new dinner-box style.
 Wrong.   SHELL GAME.  Few people are likely to avoid the restaurant ==> the current number of customers may NOT decrease. BUT it does not guarantee the number of customers will INCREASE (the goal that the management wants). Thus, D does not strengthen the argument.

(E) The restaurant eliminating table-service would otherwise have to hire new waitors and waitresses at a greater expense due to new city regulations on wage
 Wrong.  Out of scope. Nothing about "hire new waitor and waitress".

Hope it helps.

GMATPill · Answer

“Our House” restaurant is eliminating table-service from its casual dining restaurant in favor of prepared dinner boxes. The restaurant already fills every available seat during its operating hours, and the change to a dinner-box style will not reduce the available seats. Nonetheless, the restaurant's management expects revenue to increase as a result of the switch to the prepared dinner boxes without any concurrent change in revenue per customer or operating hours.
 
Which of the following, if true, provides the best reason for the expectation?

(A) One of the dinner boxes takes up less storage space than the space taken up by one of the large dishes typically used when serving table-service customers

(B) Diners eating out of a dinner box typically do not linger over dinner as long as diners who are served via standard table-service.

(C) Since the restaurant will eliminate table service for only part of the restaurant, it can continue to accommodate customers who do not wish to eat out of prepared dinner boxes.

(D) Few diners are likely to avoid the restaurant because of the new dinner-box style.

(E) The restaurant eliminating table-service would otherwise have to hire new waitors and waitresses at a greater expense due to new city regulations on wage

Original Source: Practice Pill Platform

jaituteja · Answer

Hi pqhai,

I have a doubt with D. 
If few diners will avoid the restaurant then the revenue will decrease, as restaurant will serve less customers...
"BUT it does not guarantee the number of customers will INCREASE (the goal that the management wants)"
Could not get your point.

Can you explain in details.

THanks,
Jai

pqhai · Answer

Hi Jai.

The  goal  of the management is to  increase the number of customers  as many as possible, correct? If the number of customers does NOT increase, the strategy fails.

(D) Few diners are likely to avoid the restaurant because of the new dinner-box style.
D says that "few dinners will avoid the restaurant", ==>  The number of customers decreases but NOT too many.  The revenue may stay the same, or decrease just a little bit. But "few dinners will AVOID the restaurant" does not mean the number of customers will increase.

For your doubt, please my  highlighted part above.

Hope it's clear.

PramodGeorge · Answer

My Comments are in Red!

“Our House” restaurant is eliminating table-service from its casual dining restaurant in favor of prepared dinner boxes.  Note, it is completely eliminating, not partially  The restaurant already fills every available seat during its operating hours, and the change to a dinner-box style will not reduce the available seats. Nonetheless, the restaurant's management expects revenue to increase as a result of the switch to the prepared dinner boxes without any concurrent change in revenue per customer or operating hours. If seats remian occupied at all times, work hours are the same yet revenue increases, it can only mean that more customers come and go. So for the same time and same number of seats, more customers mean more revenue

Assumption: Dinner Boxes will allow more customers to eat at the restaurant. It means that each customer wont take as long as they used to when they were served by waiters. Look for an answer choice that reflects this Idea

Which of the following, if true, provides the best reason for the expectation?

(A) One of the dinner boxes takes up less storage space than the space taken up by one of the large dishes typically used when serving table-service customers No such information provided or inference possible. Dinner Boxes maybe large for all you know!

(B) Diners eating out of a dinner box typically do not linger over dinner as long as diners who are served via standard table-service. Correctly captures the more customers/working hours assumption

(C) Since the restaurant will eliminate table service for only part of the restaurant, it can continue to accommodate customers who do not wish to eat out of prepared dinner boxes.  Incorrect Information provided. All service is migrated to dinner boxes, not some!

(D) Few diners are likely to avoid the restaurant because of the new dinner-box style.  This would mean less revenue. Argues against the conclusion and weakens it. Incorrect

(E) The restaurant eliminating table-service would otherwise have to hire new waitors and waitresses at a greater expense due to new city regulations on wage

please mark that this is a trap ans is B and not E since E will only increase profits may be but here we are concerned with only revenue.

InstantMBA · Answer

Background : “Our House” restaurant is eliminating table-service from its casual dining restaurant in favor of prepared dinner boxes.

Counter-premise : The restaurant already fills every available seat during its operating hours, and the change to a dinner-box style will not reduce the available seats.

Conclusion : Nonetheless, the restaurant's management expects revenue to increase as a result of the switch to the prepared dinner boxes without any concurrent change in revenue per customer or operating hours.

Which of the following, if true, provides the  best reason  for the expectation?

(A) One of the dinner boxes takes up less storage space than the space taken up by one of the large dishes typically used when serving table-service customers.   Off-topic. Because the restaurant already fills every available seat during its operating hours, space saving is largely off-topic. Beside, the conclusion is about revenue increase.

(B) Diners eating out of a dinner box typically do not linger over dinner as long as diners who are served via standard table-service.   This statement suggests that either the restaurant costs may be lower or the number of customers to be served may increase. Either way the total revenues are bound to increase. This helps strengthen the conclusion.

(C) Since the restaurant will eliminate table service for only part of the restaurant, it can continue to accommodate customers who do not wish to eat out of prepared dinner boxes.   That's true, but this will not lead to an  increase  in revenues.

(D) Few diners are likely to avoid the restaurant because of the new dinner-box style.   There is no information about this.

(E) The restaurant eliminating table-service would otherwise have to hire new waitors and waitresses at a greater expense due to new city regulations on wage.   Off-topic newinformation

Answer: (B)

shravs6666 · Answer

My answer : B

The option states that average time spend by customer is reduced with new strategy, hence total number of customers within the same time is increased, hence the revenue.

alnewton · Answer

I still have one issue with this question. Why is E incorrect?

The way I understood the premise

1) Complete elimination of Table Service - This implies no waiters (Waiting costs are one of the biggest costs with table seating places)
2) The stimulus mentions that the available seating will not go away, implying those chairs and tables will still be there

When I combine them, it appears that management wants to get rid of waiters and the reduce the waiting costs, which has increased because of new wage mandate.(In E)

--> So moving away from a table service restaurant to dinner box will generate more revenue, thus E.

TaN1213 · Answer

"  the restaurant's management expects revenue to increase as a result of the switch to the prepared dinner boxes  without any concurrent change in revenue per customer or operating hours . " -is a hint enough to suggest that our goal is to increase the sales without impacting other fixed expenses such as that incurred by waitressing. 
" Availability of seats " directly points to show  how  the goal should be achieved. Only B suggests that the new idea of boxes will increase the availability of seats as other customers won't linger long over the tables as they used to do earlier.

Nups1324 · Answer

VeritasKarishma GMATNinja nightblade354 svasan05 CrackVerbal carcass egmat EMPOWERgmatRichC AndrewN Dear experts, I have a confusion in this question. I followed the same approach as pqhai did. I was going to select option B as my answer, but then this phrase "without any concurrent change in revenue per customer or operating hours" at the end of the argument made me change my mind and select some other option. If option B is correct, then the revenue increases by operating hours as well, doesn't it? Please help me understand if I'm missing anything. Thank you

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svasan05 · Answer

Hi

By "operating hours", the stimulus means the time from when the restaurant opens to when it closes (for example, 10 am to 10 pm). Option (B) states that, "Diners eating out of a dinner box typically  do not linger  over dinner as long as diners who are served via standard table-service".

This does not impact the operating hours of the restaurant. It only impacts the average amount of time that a diner stays at the table. Option (B) states that this time is lower for diners eating out of a dinner box than for those who are served. If the average amount of time that a diner stays at a table is lowered, and the restaurant fills every available seat (as is given in the stimulus), then this increases the total number of customers that are served in the day (on average). If revenue per customer remains constant and number of customers increases, this would increase the total revenue made by the restaurant.

Please note that the revenue increases solely due to more customers and not due to average revenue per customer or operating hours, which is consistent with what is given in the stimulus.

Thus, option (B) correctly explains the strategy.

Hope this helps.

Nups1324 · Answer

Hi svasan05

I agree that revenue increases when the number of customers is increasing. But then it also increases the revenue per operating hours doesn't it?

If in 8 hours the restaurant was making $100 (before the change)

Now, in that same 8 hours the restaurant is making $200 (after the change)

This means that the revenue per operating hour has also increased.

I'm not concerned with revenue per customer. I'm concerned with revenue per operating hour.

As per the argument there shouldn't be a concurrent change in revenue per operating hour w.r.t. increase in total revenue.

Please let me know if I'm missing anything.

Thank you

AndrewN · Answer

Sorry to join the party a little late,  Nups1324 . I think I see the problem here. You are misinterpreting the final line of the passage, which says nothing about  revenue per operating hour :

The facts from the last line are as follows:

1)  total  revenue is expected to increase
2) revenue per customer will not change
3) operating hours will not change

You appear to have allowed the prepositional phrase  without any concurrent change in revenue  to spill over into  operating hours  as well. Not only is that a distortion of a basic  A or B  construct—the sentence is saying,  without any concurrent change in A or B —but we also have to wonder what  per operating hours  (note the plural noun) would mean. Within the given seating constraints and 2) and 3) above, what  svasan05  wrote earlier is perfectly valid.

Be careful not to get tangled up in verbiage and see only what you want to see. I hope that helps. Thank you for thinking to tag me in the original message.

- Andrew

KarishmaB · Answer

There is a change in the way food is served. 
The restaurant fills every available seat during its operating hours.
No of seats stay the same. 
Revenue per customer will stay same (per person cost stays same)
Operating hours stay the same (the restaurant still works from say 7 pm to 11 pm)

Expectation: Revenue will increase.

Think about it - it is odd, right. Only the style of serving food has changed. The cost of food is same and the operating hours are same. Why would the revenue increase then? Only if more people are served in the same time. How can more people be served? If each person spends lesser time, more people can be served in the same operating hours (it fills every available seat in its operating hrs. Think of a queue outside the restaurant till it closes).

(A) One of the dinner boxes takes up less storage space than the space taken up by one of the large dishes typically used when serving table-service customers

Table space is irrelevant. Number of seats stay the same.

(B) Diners eating out of a dinner box typically do not linger over dinner as long as diners who are served via standard table-service.

Correct. People spend less time over food so turnaround time decreases. Till now, every persons pent 1 hr for his dinner so 4 people were served in 4 hrs at every seat. Now people get done in half an hr so 8 people are served in 4 hrs at every seat. So more people are served.

(C) Since the restaurant will eliminate table service for only part of the restaurant, it can continue to accommodate customers who do not wish to eat out of prepared 
dinner boxes.

Irrelevant. Doesn't tell us why revenue will increase.

(D) Few diners are likely to avoid the restaurant because of the new dinner-box style.

At best it suggests that the revenue will stay the same with dinner boxes. Doesn't tell us why revenue will increase and not stay the same.

(E) The restaurant eliminating table-service would otherwise have to hire new waitors and waitresses at a greater expense due to new city regulations on wage

Irrelevant. We are talking about revenues only.

Answer (B)

Nups1324 · Answer

Oh..! So that operating hour part was independent.. My bad.

I deselected the correct answer because of a misinterpretation. Silly move. But anyways I learned an important lesson.

Thank you AndrewN for clarifying my mistake and thank you svasan05 and VeritasKarishma for your respective explanations.

Posted from my mobile device

Posted from my mobile device

AndrewN · Answer

No problemo,  Nups1324 . Nothing like getting not one, not two, but three Expert opinions on a single query, each response adding new insight to assist you and the larger community. It looks like you came up with a good question to ask.

- Andrew

Tanvay · Answer

(E) The restaurant eliminating table-service would otherwise have to hire new waitors and waitresses at a greater expense due to new city regulations on wage

please mark that this is a trap ans is B and not E since E will only increase profits may be but here we are concerned with only revenue.

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“Our House” restaurant is eliminating table-service

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