Previously, Autoco designed all of its cars itself and then contracted

Question

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.

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.

(B) In order to provide designs for Autoco, several of the parts suppliers will have to add to their existing staffs of designers.

(C) Parts and services provided by outside suppliers account for more than 50 percent of Autoco’s total costs.

(D) When suppliers built parts according to specifications provided by Autoco, the suppliers competed to win contracts.

(E) Most of Autoco’s suppliers have on hand a wide range of previously prepared parts designs that can readily be modified for a new car.

ID - CR00713
OG 2017 New Question

Designing Car Parts

Step 1: Identify the Question

The phrasing supports   expectation in the question stem indicates that this is a  Strengthen the Argument  question.

Step 2: Deconstruct the Argument

Before: A designs car parts alone

Now: A and suppliers design together

Supplier designers have more experience

Step 3: Pause and State the Goal

In a Strengthen problem, only one answer choice will support the conclusion. To support the conclusion, the right answer will provide evidence that Autoco’s plan will reduce the overall time and cost of the design of its next car.

Step 4: Work from Wrong to Right

(A) According to this answer choice, Autoco’s plan will likely require the company to modify its design. This modification is more likely to increase time and cost than to decrease them.

(B) This answer suggests that the collaboration will be inconvenient and/or expensive for the parts suppliers. If anything, this will increase the cost of the next car, rather than decreasing it.

(C) Based on this answer, it still isn’t clear whether the plan will reduce the time and cost of the next car design. This answer suggests that outside suppliers are an important component of costs, but does not help clarify whether the plan will reduce costs.

(D) Under Autoco’s new plan, suppliers might still compete for contracts. It’s also possible that suppliers will no longer compete for contracts, which could actually increase costs (if bidding is no longer competitive). Since the answer choice doesn’t specify which of these is correct, it isn’t clear how it affects the conclusion, which deals only with what will change after the new plan is instated.

(E) CORRECT . This answer choice suggests that suppliers will not be starting from scratch when designing new parts; they may be able to save time and/or cost by modifying existing designs. When combined with the fact that many parts suppliers have more designers with specialized experience than Autoco has, and the fact that Autoco was previously designing all of its cars itself, this suggests that collaborating with suppliers will make the design process faster and/or cheaper.

GMATNinja · Accepted Answer

First of all, Autoco is not simply planning on  outsourcing  parts to suppliers. Autoco plans to  include  its suppliers in designing the parts. Before, Autoco was designing the parts by themselves, but now they are going to INCLUDE the suppliers in the design process. That doesn't necessarily mean that the suppliers will do all of the design work by themselves.

Also, the suppliers have more specialized experience, but does that necessarily mean lower costs and shorter timelines? Maybe not. Maybe including the suppliers will INCREASE the design times (maybe the specialists are perfectionists and take more time to develop the best designs). Or maybe the specialists will charge a very high rate for their services.

We need something that indicates that including the suppliers will reduce time and cost. The percentage cited in choice (C) won't help us if including suppliers doesn't save us both time and money. In other words, whatever the percentage, we still don't have any reason to think time and costs will be reduced by the plan.

Choice (E), on the other hand, provides evidence that including suppliers  could  save time and money. The designers will be able to leverage all of the work that was done on the previously-prepared parts. This should reduce the amount of work that must be done to create new parts. In other words, the designers won't have to start from scratch.

(A) was not happening in the past. In the past, Autoco was providing the designs, and the suppliers were simply building based on those designs.

Choice (A) suggests that, if the suppliers make designs, then Autoco will have to make changes to its overall car designs. This is one way that the plan might actually INCREASE time and costs (Autoco will have to spend time and money changing its overall designs). Choice (A)  weakens  the expectation, and should be eliminated.

Choice (E) is the best answer.

jayshah0621 · Answer

(A) weakens the argument. If Autoco often needs to modify its overall design, it will not reduce the overall time and cost of the design of its next new car.

(B) also hurts the argument. If several of the parts suppliers will have to add to their existing staffs of designers, it is quite possible that those suppliers will pass on the cost to Autoco.

(D) is irrelevant.

Between (C) and (E), (E)  most strongly  supports Autoco's expectation. Here's my reasoning.

First, let's evaluate (C). If parts and services provided by outside suppliers account for more than 50 percent of Autoco’s total costs, so what? Will it reduce Autoco’s  overall time and cost  of the design of its next new car? Probably not.

Now, let's evaluate (E). Autoco plans to include its suppliers in designing the parts they are to build and many parts suppliers have more designers with specialized experience than Autoco has. Now, if 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, Autoco will not have to design those parts itself. Hence, time saved. Suppliers have part designs that can be readily modified so including them in designing the parts will save cost. So, time + cost reduced. Win win!

tryambaks · Answer

C and E can compete for the answer.

I would negate C
 
C) Parts and services provided by outside suppliers account for more than 50 percent of Autoco’s total costs. 
- Negating this we get
If supplier cost doest not account for >50 % of cost , then it would be an insignificant investment to do for the company. But however insignificant , it will reduce cost if suppliers help. So , negation does not weaken , rather strengthen by a bit. Hence eliminated

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.
- Already existing parts would not need an investment of labor for suppliers. All they have to do is just modify the parts which would cost less.
Hence this is the answer

subhash941 · Answer

Though the OG claims that A is incorrect and it is weakening statement, I strongly disagree with it.
My reasons :
1. You give some specifications to the  manufacturer  and the manufacturer will  design  the product to meet the specifications. In this case Autoco, in the past used to provide specifications and the manufactures used to design the products according to these specifications.

"A. When suppliers provide their own designs, Autoco often needs to modify its overall design."

So A was taking place in the past. So how is it a weakening statement? 
Can anyone clarify?

Regards,
Subhash

adkikani · Answer

Hi  GMATNinja   VeritasPrepKarishma   GMATNinjaTwo

Can you please help me to eliminate C?

In a practical world we outsource few tasks which are either demanding increasing 
time or screwing up our business bottom line (eg BPO / Call center / banks) Here we already know that outsourcing parts to suppliers will result in increase in bottom line from argument , and also the time that was earlier utilized in designing own parts can be efficiently used to maximize some other activity.

akadiyan · Answer

Autoco Expectation:
To reduce the overall time and cost of the design of its next new car.

A: This is a disadvantage. Modifying overall design will not reduce time or cost. Eliminated
B. If several parts suppliers add designers, the cost might be transferred to autoco. This is not our choice. Eliminated

C. Parts and Suppliers provided by outside contracts account for 50% of the cost - This is a promising choice. But this does not help to understand how the time will be reduced for Autoco. We can hold this choice for now.

D. When suppliers built parts according to specifications provided by Autoco, the suppliers competed to win contracts. - 
This is an interesting choice. In general one would think that if there is a competition, there are chance people will try to outbid others by bidding for low cost and less time to deliver. But this probably would be the case for existing bids as well. We can eliminate this choice.

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 is classic way of cost and time saving we have seen everywhere. Reusing the existing design saves both cost and time. This clearly explains the Autoco's expectation.

Between C and E, option E explains how to meet expectation better.

Ans: E

dracobook · Answer

How can you tell that (E) strengthens instead of weakens Autoco's expectation? I took (E) as something that weakened the argument since if Autoco's suppliers have on hand a wide range of previously prepared parts designs that can readily be modified for a new car, it seems to me that suppliers did not have any trouble to begin with when Autoco designed all of its cars itself and contracted the parts out (since Autoco's suppliers have on hand a wide range of previously prepared parts designs). To me this meant that there is likely little cost savings from Autoco's proposed change.

GMATNinja · Answer

Let's take another look at the expectation (i.e. conclusion) that we are trying to support:

"This shift" is referring to Autoco's plan "to include its suppliers in designing the parts they are to build," rather than designing the parts in-house. They expect this to save time and cost less because "many parts suppliers have more designers with specialized experience than Autoco has."

Note that the conclusion does not specify the  how much  time and money Autoco expects to save -- in your analysis, you state that there would be "little cost savings." In order to answer the question, we don't need to prove that there will be a  great  reduction of time and cost, just that there will be an  overall  reduction.

Let's look at answer choice (E) and analyze its impact before and after implementing the "shift":
 
Before the "shift": Autoco would use its own resources to design the parts, and then would provide these designs to its suppliers to produce.

After the "shift": Autoco would leverage its suppliers' resources to design the parts. The suppliers already have designs on hand that can be "readily... modified for a new car." From the word "readily" we can infer that this would take less time than designing parts internally, and we can also assume it will cost less to simply modify an existing design than creating one from scratch.

This answer choice definitely supports Autoco's expectation. Answer choice (E) is correct.

dharam44 · Answer

Please explain why D is incorrect ?  GMATNinja

GMATNinja · Answer

Let's take another look at the expectation (i.e. conclusion) that we are trying to support:

"This shift" refers to Autoco's plan "to include its suppliers in designing the parts they are to build," rather than designing the parts in-house. They expect this to save time and cost less because "many parts suppliers have more designers with specialized experience than Autoco has."

Now, let's apply this information to answer choice (D):
 
This answer choice deals only with with the Autoco's process  before  implementing the "shift" to including suppliers in designing parts. More specifically, it states that suppliers "competed to win contracts" to build parts. This competition could theoretically drive Autoco's costs down.

We need to support the expectation that Autoco's  new  way of doing business (i.e., including suppliers in the design process) will reduce time and costs. Because answer choice (D) introduces information about a potentially cost-saving factor of the  old  way of business, it definitely does not support Autoco's expectation. (D) is out.

I hope that helps!

thecoronafever · Answer

GMATNinja - Is the Option(E) not making an assumption that the next new car will be using some modified version of previously designed parts? If the parts in new car does not represent the modified version of current parts, this option neither determines to save cost or time. Alternatively, Option (D) does not makes such assumption. Competition might introduce reduced costs and time. Option (E) would have made much more sense if we were building the next version of same car.

Can you please help explain this?

Can you please help explain this?

acegmat20 · Answer

In Option (A) When suppliers provide their own designs, Autoco often needs to modify its overall design - now that the suppliers are a part of the production cycle, so will not be providing their own designs and hence Autoco won't need to modify its overall design, reducing the cost and time required. This is a strengthener as per my understanding, please tell me where am I going wrong?

GMATNinja · Answer

For an explanation of why (D) doesn't support the argument, check out  this  post and let me know if you have any further questions!

As for (E) -- Autoco expects that their new process will "reduce the overall time and cost of the design of its next new car." (E) give us some reasons to think that this expectation is correct: first, the suppliers already have a bunch of parts on hand. Second, these parts can be readily modified for a new car. The information added by (E) definitely supports Autoco's expectation.

You're correct, however, that (E) doesn't 100%  PROVE  that Autoco will reduce the overall time and cost of designing its next car. Maybe Autoco IS designing some crazy new vehicle that can't be built from current designs.

Luckily, we don't need to prove that the expectation is correct. We just need to choose the answer that  most strongly supports  the expectation. (E) provides that support, and none of the other answer choices come close.

I hope that helps!

GMATNinja · Answer

There are two workflows described in the passage:

The old workflow: "Autoco designed all of its cars itself and then contracted with specialized parts suppliers to build parts according to its specifications." 
 The new, proposed workflow: Autoco will "include its suppliers in designing the parts they are to build."

So, in the past, suppliers were NOT providing any input into the designs -- Autoco was doing the design work on its own.

Under the new plan, suppliers are INCLUDED IN the design process. This is not quite the same as "providing their own designs," but under the new plan, suppliers will certainly be MORE involved in the design process than they used to be.

(A) gives us a reason to believe that having suppliers provide their own design is a bad idea. If anything, this weakens the argument -- perhaps it would be better for Autoco to just design parts itself, just like it did under the old workflow! At the very least, it doesn't support the idea that including suppliers in the process will reduce the time/cost of designing a new car.

You can eliminate (A).

I hope that helps!

woohoo921 · Answer

For Choice E, I do not see how modifying the previously prepared parts designs would necessarily be cheaper. "Readily" could just address it from a time perspective and not necessarily from a cost perspective.

I also have a general CR question based on this argument. For strengthen questions, do you need to strengthen all parts of the conclusion? For instance, this argument says that Autoco expects this shift to 1.) reduce the overall time and 2.) cost of the design of its next new car. Could a correct strengthening answer choice just address the 1.) reduce overall time component or the 2.) cost of the design of its next new car component?

Thank you!

AjiteshArun · Answer

Hi  woohoo921 ,

You're absolutely right about the "time" bit.  Readily  indicates that the process will be  faster .

This is the argument:
1. Previously, Autoco did all the design work and then got its suppliers to build parts according to its (Autoco's) specifications.
2. Now, Autoco plans to include its suppliers in the design process.
3. Many suppliers have more designers with specialized experience than Autoco has.
4. Therefore, this shift will reduce the  overall time  and  cost  of the design of Autoco's next new car.

Option E tells us that most of Autoco’s suppliers have a wide range of previously prepared parts designs that can readily be modified for a new car. We already know that the word  readily  addresses the  time  bit, but the word  modified  is equally important.  There's a difference between designing a completely new part and getting a modified version of an existing part from your suppliers . It's reasonable to expect that designing a new part from scratch will be more expensive and time consuming than just modifying an existing part. That's how E addresses both  time  and  cost .

VerbalBot · Answer

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Previously, Autoco designed all of its cars itself and then contracted

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