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Sales of microwave ovens have increased considerably over the last

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Sales of microwave ovens have increased considerably over the last  [#permalink]

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New post 09 Jan 2016, 10:34
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  55% (hard)

Question Stats:

65% (02:06) correct 35% (02:12) wrong based on 282 sessions

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Sales of microwave ovens have increased considerably over the last year. In order to take advantage of this market trend, Hitek Appliances plans to increase production of its own model of microwave oven, while continuing its already extensive advertising of this product.

Which of the following, if true, provides most support for the view that Hitek Appliances cannot increase its sales of microwave ovens by adopting the plan outlined above?

A. Hitek Appliances’s average inventory of microwave ovens awaiting shipment to retailers has dropped from 1,000 to 750 over the last year.

B. Market research shows that potential customers regard Hitek Appliances’s microwave ovens to be high in quality.

C. Though Hitek Appliances’s microwave ovens are priced comparably to those of its competition, sales of Hitek Appliances’s microwave ovens have fallen in the last year.

D. Hitek Appliances’s microwave oven is one of four brands of microwave oven that have together accounted for the majority of the last year’s increase in sales.

E. Although it sells 95% of the microwave ovens that it produces, Hitek Appliances’s share of all microwave oven sales has declined over the last year.
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Re: Sales of microwave ovens have increased considerably over the last  [#permalink]

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New post 09 Jan 2016, 19:30
A. Hitek Appliances’s average inventory of microwave ovens awaiting shipment to retailers has dropped from 1,000 to 750 over the last year. ====> weaken the conclusion

B. Market research shows that potential customers regard Hitek Appliances’s microwave ovens to be high in quality. It's actually not relevant, and to some extend, it weakens the conclusion. Hight quality products seem to be sold easily.

C. Though Hitek Appliances’s microwave ovens are priced comparably to those of its competition, sales of Hitek Appliances’s microwave ovens have fallen in the last year. Bingo, first in the stimulus, they use the word "continuing its already extensive advertising", meaning that that strategy has not worked in the last year, but now they keep using it and hope that it will be better for this year

D. Hitek Appliances’s microwave oven is one of four brands of microwave oven that have together accounted for the majority of the last year’s increase in sales. ====> Strengthen the conclusion

E. Although it sells 95% of the microwave ovens that it produces (====> the ability to sell product has been already good by applying the ad strategy), Hitek Appliances’s share of all microwave oven sales has declined over the last year.
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Re: Sales of microwave ovens have increased considerably over the last  [#permalink]

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New post 15 Jan 2016, 01:18
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Sales of microwave ovens have increased considerably over the last year. In order to take advantage of this market trend, Hitek Appliances plans to increase production of its own model of microwave oven, while continuing its already extensive advertising of this product.

Which of the following, if true, provides most support for the view that Hitek Appliances cannot increase its sales of microwave ovens by adopting the plan outlined above?

A. Hitek Appliances’s average inventory of microwave ovens awaiting shipment to retailers has dropped from 1,000 to 750 over the last year.

B. Market research shows that potential customers regard Hitek Appliances’s microwave ovens to be high in quality.

C. Though Hitek Appliances’s microwave ovens are priced comparably to those of its competition, sales of Hitek Appliances’s microwave ovens have fallen in the last year.

D. Hitek Appliances’s microwave oven is one of four brands of microwave oven that have together accounted for the majority of the last year’s increase in sales.

E. Although it sells 95% of the microwave ovens that it produces, Hitek Appliances’s share of all microwave oven sales has declined over the last year.

only relevant choices are C and E.

Option C says that prices were comparable. Assume that figures are 300 USD /ovens and it is same to all the available brands.
So, if the hitek appliances' sales fall, it should go for increasing the production. There might be the better performance of the rivals' s brand.

Whereas E says that market share of the hitek appliances of the overall sales of micro-ovens has decreased. There are possibilities of new brands that entered into the market. Doesn't hint towards the individual sales downturn.
So C is the answer.
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Re: Sales of microwave ovens have increased considerably over the last  [#permalink]

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New post 16 Jan 2016, 01:40
The plan is to increase production of its own model of Microwave oven while continuing the extensive advertising of this product. Any answer choice which says that the present plan will not boost sales is the answer. "C" says that although prices have been reasonable and even after enough advertising the sales have fallen in the previous year. Hence it is very likely that the present plan will not be effective at all. The same advertising if continues will not boost sales.
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Re: Sales of microwave ovens have increased considerably over the last  [#permalink]

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New post 22 Mar 2017, 03:08
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A. Hitek Appliances’s average inventory of microwave ovens awaiting shipment to retailers has dropped from 1,000 to 750 over the last year.( Wrong Answer : This doesn’t do anything to the argument.)

B. Market research shows that potential customers regard Hitek Appliances’s microwave ovens to be high in quality.( Wrong Answer : This should serve to increase the sales of the product especially in growing market.)

C. Though Hitek Appliances’s microwave ovens are priced comparably to those of its competition, sales of Hitek Appliances’s microwave ovens have fallen in the last year.( Right Answer : This indicates that some factor other than price is affecting the sales of the product, hence increased production may not result in increase of sales.)

D. Hitek Appliances’s microwave oven is one of four brands of microwave oven that have together accounted for the majority of the last year’s increase in sales.( Wrong answer : if this is true then the sales of the product will be higher this year whereas that is not what the question stem indicates.)

E. Although it sells 95% of the microwave ovens that it produces, Hitek Appliances’s share of all microwave oven sales has declined over the last year.( wrong answer : It may be possible that Hitek appliances was not manufacturing the product in sufficient quantitites to meet the demand generated for the product in the market.)
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Sales of microwave ovens have increased considerably over the last  [#permalink]

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New post 22 Mar 2017, 09:11
Confusion should be between C and E.

E is incorrect because it doesn't matter for a company whether the share of sales has reduced or not. If it is selling everything it is producing or could see in future, no matter whether that share is 100% of the total or 10% of the total. Company is getting all its profits, so it should be Happy. :)
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Sales of microwave ovens have increased considerably over the last &nbs [#permalink] 22 Mar 2017, 09:11
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