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# Several internet-based companies that use open-source

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Senior Manager
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Several internet-based companies that use open-source [#permalink]

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07 Jul 2011, 13:30
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Several internet-based companies that use open-source software for their day-to-day operations have been surprised at the degree to which volunteer contributions increase productivity. At the same time, the overall profits of most of these companies have increased, since a much smaller percentage of overall revenue per working hour must be directed toward salaries. Beginning internet companies should imitate this successful model by hiring only a small core staff and leaving the rest of the tasks to volunteers.

The argument above that internet companies will increase profits by hiring fewer full-time employees is based on which of the following assumptions?

A) Internet companies that use open-source software are better suited to function efficiently with only a small core staff than traditional companies.
B) The amount of administrative work to be performed in internet companies is small enough that it can reasonably be completed by fewer full-time employees.
C) Full-time employees and volunteers will have different levels of access to most projects undertaken by the company.
D) Internet companies will hire more full-time employees as they become more profitable due to volunteer contributions.
E) Companies that rely on both full-time employees and volunteer labor increase their overall revenue per working hour.

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08 Jul 2011, 01:23
Clean B

clue here is 'Several internet-based companies that use open-source software for their day-to-day operations '

hence they assume the few FT employees can also do all the admin work.

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16 Sep 2011, 02:52
Clearly the answer is B as explained above
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16 Sep 2011, 15:22
I picked E...If you negate E the argument falls apart.

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17 Sep 2011, 00:25
Gud question .
Tricked me into A.

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17 Sep 2011, 02:27
i chose B too.. pretty much the similar reasoning as given by Sudhir...
while E is a good candidate, I feel E does not talk about the conclusion of hiring only a small core staff...

whats the OA and OE?

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17 Sep 2011, 02:29
GMATPASSION wrote:
Gud question .
Tricked me into A.

yea it was a good trick.... which is why, although i had nailed the answer in 2:00 mins, i had to go back to the argument and hunt for "traditional companies". took me an whooping extra 25 sec

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18 Sep 2011, 02:11
I shall go with E

Several internet-based companies that use open-source software for their day-to-day operations have been surprised at the degree to which volunteer contributions increase productivity. At the same time, the overall profits of most of these companies have increased, since a much smaller percentage of overall revenue per working hour must be directed toward salaries. Beginning internet companies should imitate this successful model by hiring only a small core staff and leaving the rest of the tasks to volunteers.

The argument above that internet companies will increase profits by hiring fewer full-time employees is based on which of the following assumptions?

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19 Sep 2011, 04:15
B for me.

If the amount of administrative work to be performed in an internet company is NOT small enough to be completed by a small task-force of full time employees, then the "hire fewer employees" model does not work

E is wrong because it is Irrelevant
The argument tells us that the companies become more profitable because of reduced expenses, not because of increased revenues.

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27 Sep 2011, 02:58
agdimple333 wrote:
Several internet-based companies that use open-source software for their day-to-day operations have been surprised at the degree to which volunteer contributions increase productivity. At the same time, the overall profits of most of these companies have increased, since a much smaller percentage of overall revenue per working hour must be directed toward salaries. Beginning internet companies should imitate this successful model by hiring only a small core staff and leaving the rest of the tasks to volunteers.

The argument above that internet companies will increase profits by hiring fewer full-time employees is based on which of the following assumptions?

A) Internet companies that use open-source software are better suited to function efficiently with only a small core staff than traditional companies.
B) The amount of administrative work to be performed in internet companies is small enough that it can reasonably be completed by fewer full-time employees.
C) Full-time employees and volunteers will have different levels of access to most projects undertaken by the company.
D) Internet companies will hire more full-time employees as they become more profitable due to volunteer contributions.
E) Companies that rely on both full-time employees and volunteer labor increase their overall revenue per working hour.

agdimple333, can you please post the OA.
I got B.
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Re: Several internet-based companies that use open-source [#permalink]

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22 Aug 2013, 00:13
1. If you negate E then it states :
Companies that rely on both full-time employees and volunteer labor may not increase their overall revenue per working hour.
Negating E makes the conclusion fall apart.
2. Where as negating B means :
The amount of administrative work to be performed in internet companies is not small enough that it can reasonably be completed by fewer full-time employees. This could mean that volunteer will perform the administrative task and this does not affect the conclusion.

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Re: Several internet-based companies that use open-source [#permalink]

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22 Aug 2013, 01:34
IMO, the conclusion of this argument is at the last sentence of the argument. Correct me if I am wrong.
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Re: Several internet-based companies that use open-source [#permalink]

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23 Aug 2013, 01:25
I think the correct answer is B.

Since assumptions are new information which are not mentioned or implied from the question stem, E cannot be the correct answer. E can be implied from "At the same time, the overall profits of most of these companies have increased, since a much smaller percentage of overall revenue per working hour must be directed toward salaries."

Coming back to B, negating B would mean the basic administrative tasks of internet companies will not be successfully or efficient completed by small group of employees. Hence the business model in the conclusion, which is deemed successful, would fail as company cannot run on small set of employees. This confirms B is correct answer.
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Re: Several internet-based companies that use open-source [#permalink]

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23 Aug 2013, 03:21
B) The amount of administrative work to be performed in internet companies is small enough that it can reasonably be completed by fewer full-time employees.

I don't think it's B. Who said anything about administrative work in specific? Am I wrong?

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Re: Several internet-based companies that use open-source [#permalink]

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23 Aug 2013, 03:30
Skag55 wrote:
B) The amount of administrative work to be performed in internet companies is small enough that it can reasonably be completed by fewer full-time employees.

I don't think it's B. Who said anything about administrative work in specific? Am I wrong?

But assumption questions do introduce new related information. You can check for any other Assumption question. I know 'Administrative Tasks' are not even mentioned in the passage but it does have a related contextual reference.
I think, one can very safely assume that without administrative tasks a company will fall apart. Hence they have specifically mentioned Administrative tasks in particular and not any other task such as, Housekeeping, etc. For example, if housekeeping jobs are not done properly because of the lack of employees the company might still work and generate profits under the model proposed.

I guess I am right, as we still don't know the Source OA of this question. But B makes more sense compared to any other option.
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Re: Several internet-based companies that use open-source [#permalink]

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23 Aug 2013, 09:30
Options: B for me

A) Internet companies that use open-source software are better suited to function efficiently with only a small core staff than traditional companies. ** comparison should be avoided.. comparing with traditional.. out of scope**
B) The amount of administrative work to be performed in internet companies is small enough that it can reasonably be completed by fewer full-time employees. **Correct, amout of work is small so fewer fulltime companies arre enough**
C) Full-time employees and volunteers will have different levels of access to most projects undertaken by the company.*** not helping with access**
D) Internet companies will hire more full-time employees as they become more profitable due to volunteer contributions. **Useless**
E) Companies that rely on both full-time employees and volunteer labor increase their overall revenue per working hour.
** focus is on lessnumber of full time employees**

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Re: Several internet-based companies that use open-source [#permalink]

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25 Aug 2013, 09:40
E for me;
The argument above that internet companies will increase profits by hiring fewer full-time employees is based on which of the following assumptions?

option E clearly provides the reason as to how lowering full time employees and hiring volunteers leads to higher profits.

Not B; it is probably a shell game answer. Nowhere, are we told about administrative work , it could well be the fact that non administrative work load can be handled by fewer FT employees . Therefore, B cannot be the assumption.
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Re: Several internet-based companies that use open-source [#permalink]

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26 Aug 2013, 01:45
IMO its NOT E.
Its an assumption question. If the option E said DO NOT as below then it would be correct
"Companies that rely on both full-time employees and volunteer labor DO NOT increase their overall revenue per working hour."

If the assumption that "Companies that rely on both full-time employees and volunteer labor increase their overall revenue per working hour" is correct than the argument is wrong. And it would be a weaken question.

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Re: Several internet-based companies that use open-source [#permalink]

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26 Aug 2013, 22:55
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sshivanis04 wrote:
1. If you negate E then it states :
Companies that rely on both full-time employees and volunteer labor may not increase their overall revenue per working hour.
Negating E makes the conclusion fall apart.
2. Where as negating B means :
The amount of administrative work to be performed in internet companies is not small enough that it can reasonably be completed by fewer full-time employees. This could mean that volunteer will perform the administrative task and this does not affect the conclusion.

Got a PM to respond to this one.

Frankly, there is no correct choice here. The question as well as the option statements are not of the highest quality. As is, no option statement qualifies as the correct choice.

Let me elaborate.

What is the conclusion of the passage?

Beginning internet companies should imitate this successful model by hiring only a small core staff and leaving the rest of the tasks to volunteers. ( we are talking about small staff i.e. we are talking in terms of absolute numbers, not in terms of comparative terms such as fewer or greater. This understanding is ABSOLUTELY CRITICAL if you solve GMAT Assumption questions. These are the keywords which make or break an option statement)

What is the basis of the conclusion?

At the same time, the overall profits of most of these companies have increased, since a much smaller percentage of overall revenue per working hour must be directed toward salaries - The first part i.e. the underlined part probably means that the profits of these internet companies have increased over time. What is the reason for this increase? The reason is that a smaller percentage of revenue must be given as salaries. It means that a lesser percentage of revenue now goes towards salaries now than before.

So, the argument is like this:

Since the profits of internet companies have increased because of lower outgo of salaries as proportion of revenues, the new starting internet companies should imitate this model and hire only a small staff.

Now, let's look at option B:

B) The amount of administrative work to be performed in internet companies is small enough that it can reasonably be completed by fewer full-time employees. - "Fewer" is a comparative term which means that the work can now be completed with less number of employees than before.

But is the conclusion about "Reducing" the number of employees? Or even is the conclusion a comparative statement?

The answer to both of these questions is NO. The conclusion only says that the new internet should hire a small staff, not fewer staff than someone else. So, option B is incorrect.

Option E:

E) Companies that rely on both full-time employees and volunteer labor increase their overall revenue per working hour.

My first question is: "increase from what?". I have to assume that it is talking about general increase over time. Even if I assume that this option is incorrect because we are talking in terms of profits. Even if revenue per working hour does not increase, the profits may still increase if the costs go down. Rather, the basis of the conclusion is talking about decline in costs, not increase in revenues. So, this option statement is also incorrect.

Other options are also incorrect for different reasons.

Thanks,
Chiranjeev
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Several internet-based companies that use open-source [#permalink]

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27 Jul 2014, 09:32
egmat wrote:
[
But is the conclusion about "Reducing" the number of employees? Or even is the conclusion a comparative statement?

The answer to both of these questions is NO. The conclusion only says that the new internet should hire a small staff, not fewer staff than someone else. So, option B is incorrect.

ng about decline in costs, not increase in revenues. So, this option statement is also incorrect.

Other options are also incorrect for different reasons.

Thanks,
Chiranjeev

so? none of the option is correct? it's a question found in gmatclub Tests..

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Several internet-based companies that use open-source   [#permalink] 27 Jul 2014, 09:32

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# Several internet-based companies that use open-source

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