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# QOTD: Following several years of declining advertising sales

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17 Aug 2017, 15:02
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Verbal Question of The Day: Day 85: Critical Reasoning

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Following several years of declining advertising sales, the Greenville Times reorganized its advertising sales force. Before reorganization, the sales force was organized geographically, with some sales representatives concentrating on city-center businesses and others concentrating on different outlying regions. The reorganization attempted to increase the sales representatives' knowledge of clients' businesses by having each sales representative deal with only one type of industry or of retailing. After the reorganization, revenue from advertising sales increased.

In assessing whether the improvement in advertising sales can properly be attributed to the reorganization, it would be most helpful to find out which of the following EXCEPT:

(A) Two years ago, what proportion of the Greenville Time's total revenue was generated by advertising sales

(B) Has the circulation of the Greenville Times increased substantially in the last two years

(C) Has there been a substantial turnover in personnel in the advertising sales force over the last 2 years

(D) Before the reorganization, had sales representatives found it difficult to keep up with relevant developments in all types of businesses to which they are assigned?

(E) Has the economy in Greenville and the surrounding regions been growing rapidly over the last two years?

Every question of the day will be followed by an expert reply by GMATNinja in 12-15 hours. Stay tuned! Post your answers and explanations to earn kudos.

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17 Aug 2017, 15:04
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4
Let's make sure we understand the given information:

• The Greenville Times (GT) had several years of declining advertising sales. During that time, "the sales force was organized geographically, with some sales representatives concentrating on city-center businesses and others concentrating on different outlying regions."
• Then, GT reorganized its advertising sales force by "having each sales representative deal with only one type of industry or of retailing." The goal of this reorganization was "to increase the sales representatives' knowledge of clients' businesses."
• After the reorganization, revenue from advertising sales increased.

Was the subsequent increase in revenue from advertising sales a result of the reorganization? In answering that question, it would be helpful to find out each of the following EXCEPT (in other words, eliminate choices representing information that would be helpful):

Quote:
(A) Two years ago, what proportion of the Greenville Time's total revenue was generated by advertising sales

We are trying to explain an increase in revenue from advertising sales, not a change to the proportion of GT's total revenue generated by advertising sales. This information would be irrelevant, so keep choice (A).

Quote:
(B) Has the circulation of the Greenville Times increased substantially in the last two years

If the circulation of GT had increased substantially, we would expect that revenue from advertising sales would have also increased, regardless of whether the reorganization had any effect. Knowing this information would be helpful in determining whether the increase in revenue from advertising sales was a result of the reorganization, so eliminate (B).

Quote:
(C) Has there been a substantial turnover in personnel in the advertising sales force over the last 2 years

If GT replaced many of their sales representatives, then the increase in revenue from advertising sales could have been a result of the change in personnel and NOT a result of the reorganization (i.e. perhaps the new sales representatives were better at their jobs than the old representatives were). Knowing this information would be helpful, so eliminate (C).

Quote:
D. Before the reorganization, had sales representatives found it difficult to keep up with relevant developments in all types of businesses to which they are assigned?

The goal of this reorganization was "to increase the sales representatives' knowledge of clients' businesses." In other words, rather than having to deal with a wide variety of businesses in a given geography, perhaps representatives could then thoroughly study one type of industry or retailing. This might allow the representatives to increase their knowledge of their clients' businesses.

However, what if, prior to the reorganization, the sales representatives had NOT found it difficult to keep up with relevant developments in all types of businesses to which they were assigned? In that case, the apparent benefit of the reorganization would have been unnecessary, and the reorganization probably would not have had an effect on revenue from advertising sales. Knowing this information would be helpful, so eliminate (D).

Quote:
E. Has the economy in Greenville and the surrounding regions been growing rapidly over the last two years?

A growth in the economy in Greenville might explain the increase in revenue from advertising sales. In order to rule out this possibility, it would be helpful to find out the answer to this question, so eliminate (E).

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##### General Discussion
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17 Aug 2017, 20:33
2
This is a very good question so let's analyse each option but first note that it is except question.
A correct .
We do not need this information
The proportion might have remained the same or changed we do not know .
If the revenue was 100 dollars and sales from advertising was 50 dollars but today sales from advertising is still at 50 dollars and the total revenue is 75 so we see that the proportion changes but we can not conclusively infer anything from this .
B If the circulation increased then the revenue from advertising can be deducted .
C this is also relevent .
As it shows that reorganization was vital for the increase in revenue.
D yes this would show that the increase was due to reorganization.
E this would also help reorganization as people with more money would buy more after seeing advertising .

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17 Aug 2017, 20:37
1
sandy217 wrote:
Is it A

Did you choose A based on this example
If advertising contribute 200dollars to 20 percent of total revenue of 1000 dollars
After reorganization advertising contributed 400 dollars which is again 20 percent of revenue of 2000 dollar
If Revenue generation from all departments increased along with advertising

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19 Aug 2017, 10:53
GMATNinja wrote:
Let's make sure we understand the given information:

• The Greenville Times (GT) had several years of declining advertising sales. During that time, "the sales force was organized geographically, with some sales representatives concentrating on city-center businesses and others concentrating on different outlying regions."
• Then, GT reorganized its advertising sales force by "having each sales representative deal with only one type of industry or of retailing." The goal of this reorganization was "to increase the sales representatives' knowledge of clients' businesses."
• After the reorganization, revenue from advertising sales increased.

Was the subsequent increase in revenue from advertising sales a result of the reorganization? In answering that question, it would be helpful to find out each of the following EXCEPT (in other words, eliminate choices representing information that would be helpful):

Quote:
(A) Two years ago, what proportion of the Greenville Time's total revenue was generated by advertising sales

We are trying to explain an increase in revenue from advertising sales, not a change to the proportion of GT's total revenue generated by advertising sales. This information would be irrelevant, so keep choice (A).

Quote:
(B) Has the circulation of the Greenville Times increased substantially in the last two years

If the circulation of GT had increased substantially, we would expect that revenue from advertising sales would have also increased, regardless of whether the reorganization had any effect. Knowing this information would be helpful in determining whether the increase in revenue from advertising sales was a result of the reorganization, so eliminate (B).

Quote:
(C) Has there been a substantial turnover in personnel in the advertising sales force over the last 2 years

If GT replaced many of their sales representatives, then the increase in revenue from advertising sales could have been a result of the change in personnel and NOT a result of the reorganization (i.e. perhaps the new sales representatives were better at their jobs than the old representatives were). Knowing this information would be helpful, so eliminate (C).

Quote:
D. Before the reorganization, had sales representatives found it difficult to keep up with relevant developments in all types of businesses to which they are assigned?

The goal of this reorganization was "to increase the sales representatives' knowledge of clients' businesses." In other words, rather than having to deal with a wide variety of businesses in a given geography, perhaps representatives could then thoroughly study one type of industry or retailing. This might allow the representatives to increase their knowledge of their clients' businesses.

However, what if, prior to the reorganization, the sales representatives had NOT found it difficult to keep up with relevant developments in all types of businesses to which they were assigned? In that case, the apparent benefit of the reorganization would have been unnecessary, and the reorganization probably would not have had an effect on revenue from advertising sales. Knowing this information would be helpful, so eliminate (D).

Quote:
E. Has the economy in Greenville and the surrounding regions been growing rapidly over the last two years?

A growth in the economy in Greenville might explain the increase in revenue from advertising sales. In order to rule out this possibility, it would be helpful to find out the answer to this question, so eliminate (E).

Why to assume that The Greenville Times (GT) is being circulated near The Greenville city - former is a name of a magazine, later is a city....
I opted E because of this assumption...
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08 Nov 2017, 14:33
Why to assume that The Greenville Times (GT) is being circulated near The Greenville city - former is a name of a magazine, later is a city....
I opted E because of this assumption...
[Reveal] Spoiler: OA

The GMAT will not try to trick you on something like this (i.e. "Well the NEWSPAPER was called the Greenville Times, but it was actually circulated in New York City, so ha!"). That is not their style

Because no other city or region is mentioned in the passage, you can safely assume that the Greenville times is circulated in Greenville.
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08 Nov 2017, 20:29
I think A is wrong.

Clearly it was mentioned that several years ago SALES were less, but not the revenue. and now it was mentioned that REVENUE is increased. So clearly we need to evaluate the revenue of two years back with revenue of now, which is option A.

where did i get wrong?
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08 Nov 2017, 23:41
GMATNinjaTwo wrote:
Why to assume that The Greenville Times (GT) is being circulated near The Greenville city - former is a name of a magazine, later is a city....
I opted E because of this assumption...
[Reveal] Spoiler: OA

The GMAT will not try to trick you on something like this (i.e. "Well the NEWSPAPER was called the Greenville Times, but it was actually circulated in New York City, so ha!"). That is not their style

Because no other city or region is mentioned in the passage, you can safely assume that the Greenville times is circulated in Greenville.

I am confused between A and E.
I don't know what "Greenville" refers. It is the city or newspaper. If it refers to city, we can say that this information is not useful in evaluating.
If E statement were restructured as below, I would easily eliminate E.
E. Has the economy in Greenville Times been growing rapidly over the last two years?
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14 Nov 2017, 20:05
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imyuva wrote:
I am confused between A and E.
I don't know what "Greenville" refers. It is the city or newspaper. If it refers to city, we can say that this information is not useful in evaluating.
If E statement were restructured as below, I would easily eliminate E.
E. Has the economy in Greenville Times been growing rapidly over the last two years?

Greenville is the name of both the newspaper and the town.... just like the New York Times is a newspaper serving the New York region.

gvrk_77 wrote:
I think A is wrong.

Clearly it was mentioned that several years ago SALES were less, but not the revenue. and now it was mentioned that REVENUE is increased. So clearly we need to evaluate the revenue of two years back with revenue of now, which is option A.

where did i get wrong?

Quote:
(A) Two years ago, what proportion of the Greenville Time's total revenue was generated by advertising sales

If advertising SALES were declining, then revenue from advertising sales was declining. "Sales" does not refer to the number of transactions. Rather, it refers to how much money they took in by selling ads. If you aren't convinced, the question stem itself confirms that ad sales have improved: "In assessing whether the improvement in advertising sales." You don't need to worry about scenarios that contradict the question stem itself.

So we can confidently assume that ad sales have been better since the reorganization, and we need to evaluate whether the reorganization caused that improvement. Knowing choice (A) wouldn't help us. Let's say I told you that two years ago, 75% of GT's revenue came from ad sales... does that help you evaluate whether the reorganization caused the improvement? Nope, so eliminate (A).
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23 Mar 2018, 07:27
GMATNinja wrote:
imyuva wrote:
I am confused between A and E.
I don't know what "Greenville" refers. It is the city or newspaper. If it refers to city, we can say that this information is not useful in evaluating.
If E statement were restructured as below, I would easily eliminate E.
E. Has the economy in Greenville Times been growing rapidly over the last two years?

Greenville is the name of both the newspaper and the town.... just like the New York Times is a newspaper serving the New York region.

gvrk_77 wrote:
I think A is wrong.

Clearly it was mentioned that several years ago SALES were less, but not the revenue. and now it was mentioned that REVENUE is increased. So clearly we need to evaluate the revenue of two years back with revenue of now, which is option A.

where did i get wrong?

Quote:
(A) Two years ago, what proportion of the Greenville Time's total revenue was generated by advertising sales

If advertising SALES were declining, then revenue from advertising sales was declining. "Sales" does not refer to the number of transactions. Rather, it refers to how much money they took in by selling ads. If you aren't convinced, the question stem itself confirms that ad sales have improved: "In assessing whether the improvement in advertising sales." You don't need to worry about scenarios that contradict the question stem itself.

So we can confidently assume that ad sales have been better since the reorganization, and we need to evaluate whether the reorganization caused that improvement. Knowing choice (A) wouldn't help us. Let's say I told you that two years ago, 75% of GT's revenue came from ad sales... does that help you evaluate whether the reorganization caused the improvement? Nope, so eliminate (A).

Hello GMATNinja,

I hope you and junior ninja are doing good.

I have a doubt regarding option "E". I agree A isn't helping us evaluate the argument, but how can economy help me decide whether a firms sales increased?
For example: India's economy is improving, yet Chevrolet had to close it's operations in India. "Economy" is a very broad term and can't be used to depict such figures as sales for a particular firm. We might be able to generalise for an industry, but for firm? --NO WAY !!

Please throw some light on my doubt.

Regards
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23 Mar 2018, 20:03
gmatexam439 wrote:
GMATNinja wrote:
imyuva wrote:
I am confused between A and E.
I don't know what "Greenville" refers. It is the city or newspaper. If it refers to city, we can say that this information is not useful in evaluating.
If E statement were restructured as below, I would easily eliminate E.
E. Has the economy in Greenville Times been growing rapidly over the last two years?

Greenville is the name of both the newspaper and the town.... just like the New York Times is a newspaper serving the New York region.

gvrk_77 wrote:
I think A is wrong.

Clearly it was mentioned that several years ago SALES were less, but not the revenue. and now it was mentioned that REVENUE is increased. So clearly we need to evaluate the revenue of two years back with revenue of now, which is option A.

where did i get wrong?

Quote:
(A) Two years ago, what proportion of the Greenville Time's total revenue was generated by advertising sales

If advertising SALES were declining, then revenue from advertising sales was declining. "Sales" does not refer to the number of transactions. Rather, it refers to how much money they took in by selling ads. If you aren't convinced, the question stem itself confirms that ad sales have improved: "In assessing whether the improvement in advertising sales." You don't need to worry about scenarios that contradict the question stem itself.

So we can confidently assume that ad sales have been better since the reorganization, and we need to evaluate whether the reorganization caused that improvement. Knowing choice (A) wouldn't help us. Let's say I told you that two years ago, 75% of GT's revenue came from ad sales... does that help you evaluate whether the reorganization caused the improvement? Nope, so eliminate (A).

Hello GMATNinja,

I hope you and junior ninja are doing good.

I have a doubt regarding option "E". I agree A isn't helping us evaluate the argument, but how can economy help me decide whether a firms sales increased?
For example: India's economy is improving, yet Chevrolet had to close it's operations in India. "Economy" is a very broad term and can't be used to depict such figures as sales for a particular firm. We might be able to generalise for an industry, but for firm? --NO WAY !!

Please throw some light on my doubt.

Regards

Hi gmatexam439, the little ninja is doing well, thanks! She already has ninja-like eating skills.

I understand your concern with option (E)... even if the economy is doing well, that might not explain an increase in revenue from ad sales for GT. But remember what they are asking:

Quote:
In assessing whether the improvement in advertising sales can properly be attributed to the reorganization, it would be most helpful to find out which of the following EXCEPT:

If, for example, you are between choice (A) and choice (E), you have to decide which of two would be the least helpful. As you noted, choice (A) does not help at all.

Does choice (E) help? Well, if we find out that the economy has NOT been growing rapidly, then we can rule out an alternative explanation for the data. That would be evidence that "the improvement in advertising sales can properly be attributed to the reorganization."

But if the economy HAS been growing rapidly, then we have a possible alternative explanation. Does this PROVE that the improvement in advertising sales cannot properly be attributed to the reorganization? Absolutely not. But it certainly gives us a reason to doubt that theory. In other words, the answer to choice (E) certainly affects how we feel about that theory, so knowing that information would be helpful.

I hope that makes some sense! Let us know if you still have doubts.
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24 Mar 2018, 04:12
GMATNinja wrote:
Hi gmatexam439, the little ninja is doing well, thanks! She already has ninja-like eating skills.

I understand your concern with option (E)... even if the economy is doing well, that might not explain an increase in revenue from ad sales for GT. But remember what they are asking:

Quote:
In assessing whether the improvement in advertising sales can properly be attributed to the reorganization, it would be most helpful to find out which of the following EXCEPT:

If, for example, you are between choice (A) and choice (E), you have to decide which of two would be the least helpful. As you noted, choice (A) does not help at all.

Does choice (E) help? Well, if we find out that the economy has NOT been growing rapidly, then we can rule out an alternative explanation for the data. That would be evidence that "the improvement in advertising sales can properly be attributed to the reorganization."

But if the economy HAS been growing rapidly, then we have a possible alternative explanation. Does this PROVE that the improvement in advertising sales cannot properly be attributed to the reorganization? Absolutely not. But it certainly gives us a reason to doubt that theory. In other words, the answer to choice (E) certainly affects how we feel about that theory, so knowing that information would be helpful.

I hope that makes some sense! Let us know if you still have doubts.

Hello GMATNinja sire,

Good to know that. I hope she isn't favouring "bhindi masala" from the word go

Besides, yes I got your point. But it would be difficult to choose between the 2 in the real deal with the kind of pressure one has.
But, I do want to see such questions in my exam because it would be indication that I am performing well

GMAT really plays game with a person's psychology !!

Thank you for the prompt reply sire.
Have a good day!
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26 Mar 2018, 10:05
gmatexam439 wrote:

Hello GMATNinja sire,

Good to know that. I hope she isn't favouring "bhindi masala" from the word go

It's been strange. She seems to favor milk, no matter how hard I try to feed her bhindi masala.
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17 Aug 2018, 08:38
Hi,

Could you please help me understand how circulation increases the advertising sales revenue? I am assuming that GT is a newspaper. Even if the number of people who read the newspaper increases from 1000 to 2000 the sales from advertising remains same right?

GMATNinjaTwo wrote:
Why to assume that The Greenville Times (GT) is being circulated near The Greenville city - former is a name of a magazine, later is a city....
I opted E because of this assumption...
[Reveal] Spoiler: OA

The GMAT will not try to trick you on something like this (i.e. "Well the NEWSPAPER was called the Greenville Times, but it was actually circulated in New York City, so ha!"). That is not their style

Because no other city or region is mentioned in the passage, you can safely assume that the Greenville times is circulated in Greenville.
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17 Aug 2018, 17:27
mrinalsharma1990 wrote:
Hi,

Could you please help me understand how circulation increases the advertising sales revenue? I am assuming that GT is a newspaper. Even if the number of people who read the newspaper increases from 1000 to 2000 the sales from advertising remains same right?

Think of it this way: if you're a business owner, would you pay more to advertise in a small-town newspaper that is only read by 500 people, or in a popular, big-city newspaper that reaches 3,000,000 people every day? The whole point of advertising is to reach an audience of potential customers, and it makes perfect sense to pay more in order to reach a larger audience.

I hope that helps!
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Joined: 16 Jun 2018
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18 Aug 2018, 00:06
Yes that makes complete sense. However doesn't that imply that the increase in circulation(which may be attributed to any reason such as quality of articles in the newspaper) has led to an increase in advertising by more clients willing to advertise in GT if that is the case then how has the reorganization contributed to increase in advertising sales.

Okay, I still typed out the entire sentence above, however half way through I paused and went and read your explanation again for why B is not the answer and I realized that knowing this information would be helpful in determining whether reorganization contributed to the increase in sales because if circulation increased then the reorganization probably did not contribute to the increase in sales. Am I right?

GMATNinja wrote:
mrinalsharma1990 wrote:
Hi,

Could you please help me understand how circulation increases the advertising sales revenue? I am assuming that GT is a newspaper. Even if the number of people who read the newspaper increases from 1000 to 2000 the sales from advertising remains same right?

Think of it this way: if you're a business owner, would you pay more to advertise in a small-town newspaper that is only read by 500 people, or in a popular, big-city newspaper that reaches 3,000,000 people every day? The whole point of advertising is to reach an audience of potential customers, and it makes perfect sense to pay more in order to reach a larger audience.

I hope that helps!
Re: QOTD: Following several years of declining advertising sales &nbs [#permalink] 18 Aug 2018, 00:06
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