Previously, Autoco designed all of its cars itself and then contracted with specialized parts suppliers to build parts according to its specifications.
Now it plans to include its suppliers in designing the parts they are to build.
Since many parts suppliers have more designers with specialized experience than Autoco has,
Autoco expects this shift to reduce the overall time and cost of the design of its next new car.
The assumption that Autoco makes is that currently the time and cost of designing new car is high because Autoco is contracting specialized parts supplier and not including these suppliers from the initial stage of designing the parts itself. By including these specialized parts supplier in designing the parts from the initial stages itself, Autoco would save time and money. How is that possible, is the question!
Which of the following, if true, most strongly supports Autoco’s expectation?
(A) When suppliers provide their own designs, Autoco often needs to modify its overall design - Autoco needs to do double work. This increases time. Thus is a weakener!
Reject (B) In order to provide designs for Autoco, several of the parts suppliers will have to add to their existing staffs of designers. - The suppliers already have more designers with specialized experience than Autoco has, adding to it this existing staff would mean increased cost. Again a weakener!
Reject(C) Parts and services provided by outside suppliers account for more than 50 percent of Autoco’s total costs. - This does not tell us how Autoco would save time and cost by in-housing the suppliers.
Reject (D) When suppliers built parts according to specifications provided by Autoco, the suppliers competed to win contracts - Thus Autoco would make the selection of suppliers as per bidding, selecting the one that would fit the budget and do the job. By including the suppliers in the design process itself, the suppliers still might have to compete and Autoco could still make a selection based on the same criteria - fits the budget and does the job. No discussion around why would Autoco save time and cost by including the suppliers in house.
Reject(E) Most of the Autoco’s suppliers have on hand a wide range of previously prepared parts designs that can readily be modified for a new car. - This calls for less efforts on Autoco's part. Designs that can 'readily' be modified means the time factor is also taken care of. Thus, by including the suppliers in Autoco's design process of new car, Autoco would save time on designing parts from scratch. How would Autoco save cost of design of its new car? Earlier, Autoco used to pay its own designers to create the designs from scratch. With available designs to choose from and which could be 'readily modified', not much work is left on part of the designers of Autoco or of suppliers for that matter. Thus Autoco would save cost.
Bingo!Some kudos would do no harm
Analysis of my post would help me cross 700 mark!