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

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Previously, Autoco designed all of its cars itself and then contracted  [#permalink]

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18 Jun 2016, 11:29
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78% (01:47) correct 22% (01:58) wrong based on 2041 sessions

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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 the 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 [the] 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

© design time & cost ↓

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.

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Re: Previously, Autoco designed all of its cars itself and then contracted  [#permalink]

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09 Sep 2016, 09:25
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AbdurRakib wrote:
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 the Autoco’s suppliers have on hand a wide range of previously prepared parts designs that can readily be modified for a new car.

OG 2017 New Question

(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!
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Re: Previously, Autoco designed all of its cars itself and then contracted  [#permalink]

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18 Jun 2016, 22:10
2
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.
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Re: Previously, Autoco designed all of its cars itself and then contracted  [#permalink]

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19 Jun 2016, 01:04
I know this is not a Sentence Correction question, but ...

Shouldn't "Since many parts suppliers have more designers with specialized experience than Autoco has" be "Since many parts suppliers have more designers with specialized experience than Autoco does"? The auxiliary verb is clearly "do" rather than "have".
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Re: Previously, Autoco designed all of its cars itself and then contracted  [#permalink]

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19 Jun 2016, 20:03
1
HiLine wrote:
I know this is not a Sentence Correction question, but ...

Shouldn't "Since many parts suppliers have more designers with specialized experience than Autoco has" be "Since many parts suppliers have more designers with specialized experience than Autoco does"? The auxiliary verb is clearly "do" rather than "have".

I will try to explain here.

No , 'does' is not correct here.

This is based on parallelism
Since many parts suppliers have more designers with specialized experience than Autoco has
There are two parts in the sentence that should be parallel.Let me break it :
1.many parts suppliers have designers with specialized experience
2. Autoco has designers as well
And Parts suppliers have more than what Autoco has

So 'has' is not auxiliary here . It is the main verb , and they must be parallel.

If use does in place of have , it will mean : Autoco does have designers - here does is the auxiliary verb that is stressing on the point that Autoco has designers and this is not necessary here. It is actually non nonsensical. Because.Because if you stress on the point that Autoco has designers then why would you suggest that autoco must give the control to third party designers
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Re: Previously, Autoco designed all of its cars itself and then contracted  [#permalink]

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06 Jul 2016, 11:46
1
E.

Was between C and E however if you think C in more detail you will see that if the other costs actually increase, then it will not be able to support the expectation.

Lets say if it was 60% outside supplier and the rest is other costs. If 60% of it went down, there is nothing to say that the rest of the cost stays the same.

E takes a safer route and doesn't allow for such an assumption and that bet pays off
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Re: Previously, Autoco designed all of its cars itself and then contracted  [#permalink]

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28 Jan 2017, 07:40
AbdurRakib wrote:
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 the Autoco’s suppliers have on hand a wide range of previously prepared parts designs that can readily be modified for a new car.

OG 2017 New Question

Hi Experts EMPOWERgmatMax,

Could you please provide your comments for option c? in option C we can see pats and services are responsible for significant amount. .

Thanks
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Re: Previously, Autoco designed all of its cars itself and then contracted  [#permalink]

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21 Dec 2017, 13:20
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?

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Re: Previously, Autoco designed all of its cars itself and then contracted  [#permalink]

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11 Feb 2018, 03:46
Hi GMATNinja VeritasPrepKarishma GMATNinjaTwo

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.
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Re: Previously, Autoco designed all of its cars itself and then contracted  [#permalink]

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11 Feb 2018, 10:25
1
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
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Re: Previously, Autoco designed all of its cars itself and then contracted  [#permalink]

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15 Feb 2018, 23:14
2
1
Quote:
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 the Autoco’s suppliers have on hand a wide range of previously prepared parts designs that can readily be modified for a new car.
Hi GMATNinja VeritasPrepKarishma GMATNinjaTwo

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.

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.

subhash941 wrote:
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

(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.
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Re: Previously, Autoco designed all of its cars itself and then contracted  [#permalink]

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21 Nov 2018, 21:21
I would like to mention how I solved this problem. I am from IT industry and as soon as I started reading this I could easily correlate the situation with computer industry. Where autoco was like customer n supplier was like service provider such as infosys etc. the option E appeared to me the same as “re use code “ feature our industry have. And whoa. Problem solved. Most of the time if you are able to get into the depth of the argument, it becomes relatively easy.

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Re: Previously, Autoco designed all of its cars itself and then contracted  [#permalink]

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12 Jan 2019, 17:49
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.
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Re: Previously, Autoco designed all of its cars itself and then contracted  [#permalink]

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08 Feb 2019, 00:40
dracobook wrote:
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.

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

Quote:
Autoco expects this shift to reduce the overall time and cost of the design of its next new car.

"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":
Quote:
(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.

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.
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Re: Previously, Autoco designed all of its cars itself and then contracted  [#permalink]

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13 Feb 2019, 23:29
Please explain why D is incorrect ? GMATNinja
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Re: Previously, Autoco designed all of its cars itself and then contracted  [#permalink]

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11 Mar 2019, 01:21
1
dharam44 wrote:
Please explain why D is incorrect ? GMATNinja

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

Quote:
Autoco expects this shift to reduce the overall time and cost of the design of its next new car.

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

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!
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Re: Previously, Autoco designed all of its cars itself and then contracted  [#permalink]

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11 Mar 2019, 01:38
E fits the bill the best as it gives some details on the reduction of time and hence cost.
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Re: Previously, Autoco designed all of its cars itself and then contracted  [#permalink]

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11 Mar 2019, 10:44
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out of your immensely busy schedule, you just replied to my post....thanks a lot
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Re: Previously, Autoco designed all of its cars itself and then contracted  [#permalink]

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06 May 2019, 09:56
Conclusion talks about the reduction of the cost of the design of New car however C talks about Autoco's total cost. See the gap

Hi GMATNinja VeritasPrepKarishma GMATNinjaTwo

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.

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Re: Previously, Autoco designed all of its cars itself and then contracted   [#permalink] 06 May 2019, 09:56
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