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Shereen cosmetics sometimes discount the price of its premium eye shad

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Shereen cosmetics sometimes discount the price of its premium eye shad  [#permalink]

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New post 22 Oct 2019, 21:27
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Competition Mode Question



Shereen cosmetics sometimes discount the price of its premium eye shadows to retailers for a promotion period when the product is advertised to consumers. Such promotions often result in a dramatic increase in amount of premium eye shadows sold by the manufacturers to retailers. Nevertheless, the manufacturers could often make more profit by not holding the promotions.

Which of the following, if true, most strongly supports the claim above about the manufacturers' profit?

A. The amount of discount generally offered by manufacturers to retailers is carefully calculated to represent the minimum needed to draw consumers' attention to the eye shadows.

B. For many consumer products the period of advertising discounted prices to consumers is about a week, not sufficiently long for consumers to become used to the sale price.

C. For cosmetics that are not newly introduced, the purpose of such promotions is to keep the products in the minds of consumers and to attract consumers who are currently using competing products.

D. During such a promotion retailers tend to accumulate in their warehouses inventory bought at discount; they then sell much of it later at their regular price.

E. If a manufacturer fails to offer such promotions but its competitor offers them, that competitor will tend to attract consumers away from the manufacturer's

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Re: Shereen cosmetics sometimes discount the price of its premium eye shad  [#permalink]

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New post 22 Oct 2019, 22:06
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Shereen cosmetics sometimes discount the price of its premium eye shadows to retailers for a promotion period when the product is advertised to consumers. Such promotions often result in a dramatic increase in amount of premium eye shadows sold by the manufacturers to retailers. Nevertheless, the manufacturers could often make more profit by not holding the promotions.

Which of the following, if true, most strongly supports the claim above about the manufacturers' profit?

A. The amount of discount generally offered by manufacturers to retailers is carefully calculated to represent the minimum needed to draw consumers' attention to the eye shadows.

B. For many consumer products the period of advertising discounted prices to consumers is about a week, not sufficiently long for consumers to become used to the sale price.

C. For cosmetics that are not newly introduced, the purpose of such promotions is to keep the products in the minds of consumers and to attract consumers who are currently using competing products.

D. During such a promotion retailers tend to accumulate in their warehouses inventory bought at discount; they then sell much of it later at their regular price.

E. If a manufacturer fails to offer such promotions but its competitor offers them, that competitor will tend to attract consumers away from the manufacturer's


We have to strengthen the argument that manufacturers could often make more profit by not holding the promotions as described in the passage.

Option D serves our purpose as it points out that during such promotions retailers buy more cosmetics from manufacturers than there is a demand for, thus buying extra inventory at a discounted price, which otherwise could have been sold by the manufacturer to retailers for regular price during a non-promotion period.

Option A has no impact on the argument as how the discount value is calculated is not our concern.

Option B in a way weakens the argument.

Option C is irrelevant.

Option E weakens the argument.
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Re: Shereen cosmetics sometimes discount the price of its premium eye shad  [#permalink]

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New post 22 Oct 2019, 22:38
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conclusion ; Such promotions often result in a dramatic increase in amount of premium eye shadows sold by the manufacturers to retailers. Nevertheless, the manufacturers could often make more profit by not holding the promotions.

IMO D;
During such a promotion retailers tend to accumulate in their warehouses inventory bought at discount; they then sell much of it later at their regular price.

Shereen cosmetics sometimes discount the price of its premium eye shadows to retailers for a promotion period when the product is advertised to consumers.
Such promotions often result in a dramatic increase in amount of premium eye shadows sold by the manufacturers to retailers. Nevertheless, the manufacturers could often make more profit by not holding the promotions.

Which of the following, if true, most strongly supports the claim above about the manufacturers' profit?

A. The amount of discount generally offered by manufacturers to retailers is carefully calculated to represent the minimum needed to draw consumers' attention to the eye shadows.

B. For many consumer products the period of advertising discounted prices to consumers is about a week, not sufficiently long for consumers to become used to the sale price.

C. For cosmetics that are not newly introduced, the purpose of such promotions is to keep the products in the minds of consumers and to attract consumers who are currently using competing products.

D. During such a promotion retailers tend to accumulate in their warehouses inventory bought at discount; they then sell much of it later at their regular price.

E. If a manufacturer fails to offer such promotions but its competitor offers them, that competitor will tend to attract consumers away from the manufacturer's
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Re: Shereen cosmetics sometimes discount the price of its premium eye shad  [#permalink]

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New post 22 Oct 2019, 23:58
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A. The amount of discount generally offered by manufacturers to retailers is carefully calculated to represent the minimum needed to draw consumers' attention to the eye shadows.....info Not required

B. For many consumer products the period of advertising discounted prices to consumers is about a week, not sufficiently long for consumers to become used to the sale price....Not required

C. For cosmetics that are not newly introduced, the purpose of such promotions is to keep the products in the minds of consumers and to attract consumers who are currently using competing products....opposite

D. During such a promotion retailers tend to accumulate in their warehouses inventory bought at discount; they then sell much of it later at their regular price....SO Promotion is not going to make much change in profit..CORRECT

E. If a manufacturer fails to offer such promotions but its competitor offers them, that competitor will tend to attract consumers away from the manufacturer's... Opposite


OA:D

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Re: Shereen cosmetics sometimes discount the price of its premium eye shad  [#permalink]

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New post 23 Oct 2019, 00:48
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Shereen cosmetics sometimes discount the price of its premium eye shadows to retailers for a promotion period when the product is advertised to consumers.
Such promotions often result in a dramatic increase in amount of premium eye shadows sold by the manufacturers to retailers. Nevertheless, the manufacturers could often make more profit by not holding the promotions.

the promotion must result in a lesser profit for the company meaning the promotion may be discount on the price or giving extra pieces(increasing the cost) retailer may need to buy it anyways and if they buy it now they got discount meaning the manufacturer make less profit by holding the promotion

Which of the following, if true, most strongly supports the claim above about the manufacturers' profit?

A. The amount of discount generally offered by manufacturers to retailers is carefully calculated to represent the minimum needed to draw consumers' attention to the eye shadows.--irrelavant

B. For many consumer products the period of advertising discounted prices to consumers is about a week, not sufficiently long for consumers to become used to the sale price.--not related

C. For cosmetics that are not newly introduced, the purpose of such promotions is to keep the products in the minds of consumers and to attract consumers who are currently using competing products. --if that's the case, manufacturer could not make more profit by not holding the promotion

D. During such a promotion retailers tend to accumulate in their warehouses inventory bought at discount; they then sell much of it later at their regular price. --correct

E. If a manufacturer fails to offer such promotions but its competitor offers them, that competitor will tend to attract consumers away from the manufacturer's --opposite of what we are looking for.


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Re: Shereen cosmetics sometimes discount the price of its premium eye shad  [#permalink]

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New post 23 Oct 2019, 06:30
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The right answer has to be option D in my view.

Premise 1: SC discounts the price of its eye shadows to retailers for a promotion period when the products are advertised to consumers.
Premise 2: These promotions result in a dramatic increase in sales of the products.

Conclusion: The manufacturer could often make more profit by not holding the promotions.

We need an answer choice that shows that despite the increase in sales volume puts the manufacturer at a disadvantage of losing profits.
Option D states that retailers purchase higher volumes of the products and hoards them in order to sell them later at a regular price. This means that some of the products meant for sale during the promotion period are actually not sold by retailers, but rather sold during normal periods. The retailer would therefore make lesser purchases at some periods after the promotion, creating the impression as though consumer purchases are low, meanwhile they are not low. Retailers as a result, benefit to the detriment of the manufacturer from the promotions, hence the manufacturer could have made more profit if the promotions were not held.
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Re: Shereen cosmetics sometimes discount the price of its premium eye shad  [#permalink]

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New post 23 Oct 2019, 06:55
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i got stuck between B and D. But I felt D is more appealing. since users will buy as much as ever even after offer/promotion is over.
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Re: Shereen cosmetics sometimes discount the price of its premium eye shad  [#permalink]

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New post 23 Oct 2019, 09:11
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Quote:
Shereen cosmetics sometimes discount the price of its premium eye shadows to retailers for a promotion period when the product is advertised to consumers.
Such promotions often result in a dramatic increase in amount of premium eye shadows sold by the manufacturers to retailers. Nevertheless, the manufacturers could often make more profit by not holding the promotions.

Which of the following, if true, most strongly supports the claim above about the manufacturers' profit?

A. The amount of discount generally offered by manufacturers to retailers is carefully calculated to represent the minimum needed to draw consumers' attention to the eye shadows.
B. For many consumer products the period of advertising discounted prices to consumers is about a week, not sufficiently long for consumers to become used to the sale price.
C. For cosmetics that are not newly introduced, the purpose of such promotions is to keep the products in the minds of consumers and to attract consumers who are currently using competing products.
D. During such a promotion retailers tend to accumulate in their warehouses inventory bought at discount; they then sell much of it later at their regular price.
E. If a manufacturer fails to offer such promotions but its competitor offers them, that competitor will tend to attract consumers away from the manufacturer's


ARGUMENT
[con] manufacturer would increase profit if it didn't hold the promotion;
[prem] manufacturer discounts a product to retailers during a period when the product is being advertised, which results in a dramatic sales increase;
[asum] assumes that without discounting product during such period, profits would increase; why? maybe the demand for the products are such that retailers would keep buying at regular price, and advertising is enough to draw more consumers, instead of price discounting.

STRENGTHEN
A. if the product is discounted at the min attractive price, this doesn't mean that retailers pass along these prices;
B. doesn't strengthen the argument;
C. "new products" out of scope;
E. this weakens;

Answer (D): if the products sold at discount are not made available during the promo period, and then are sold at regular prices, then the promotions are often useless; thus not spending on ads/discount products would increase profits.
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Re: Shereen cosmetics sometimes discount the price of its premium eye shad  [#permalink]

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New post 23 Oct 2019, 10:39
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Shereen cosmetics sometimes discount the price of its premium eye shadows to retailers for a promotion period when the product is advertised to consumers.
Such promotions often result in a dramatic increase in amount of premium eye shadows sold by the manufacturers to retailers. Nevertheless, the manufacturers could often make more profit by not holding the promotions.

Which of the following, if true, most strongly supports the claim above about the manufacturers' profit?


Stimulus: Manufacturers give discount to retailers during the promotional period because of which retailers sales boost and in turn they earn profit. Manufacturers to gain profit should not give promotionals to retailers.

A. The amount of discount generally offered by manufacturers to retailers is carefully calculated to represent the minimum needed to draw consumers' attention to the eye shadows.

B. For many consumer products the period of advertising discounted prices to consumers is about a week, not sufficiently long for consumers to become used to the sale price.

C. For cosmetics that are not newly introduced, the purpose of such promotions is to keep the products in the minds of consumers and to attract consumers who are currently using competing products.

D. During such a promotion retailers tend to accumulate in their warehouses inventory bought at discount; they then sell much of it later at their regular price. correct answer retailers accumulate

E. If a manufacturer fails to offer such promotions but its competitor offers them, that competitor will tend to attract consumers away from the manufacturer's

The retailers earn profit by sticking the goods given during promotional phase there by manufacturers should stop giving promotional to retailers.
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Re: Shereen cosmetics sometimes discount the price of its premium eye shad  [#permalink]

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New post 23 Oct 2019, 11:17
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IMO Option D

If retailers does not sell the product to consumers at discounted price and rather sell the same product at regular price, the promotion is only profiting the retailers and the product anyways is not reaching the customers.

So, by not holding the promotions, company can make more profits from selling the product at regular price to retailers
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Re: Shereen cosmetics sometimes discount the price of its premium eye shad  [#permalink]

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New post 23 Oct 2019, 18:09
I would go for B.

Other options are Out of scope (not taking about manufacturer’s profit)

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Re: Shereen cosmetics sometimes discount the price of its premium eye shad  [#permalink]

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New post 23 Oct 2019, 21:16
Bunuel wrote:

Competition Mode Question



Shereen cosmetics sometimes discount the price of its premium eye shadows to retailers for a promotion period when the product is advertised to consumers. Such promotions often result in a dramatic increase in amount of premium eye shadows sold by the manufacturers to retailers. Nevertheless, the manufacturers could often make more profit by not holding the promotions.

Which of the following, if true, most strongly supports the claim above about the manufacturers' profit?

A. The amount of discount generally offered by manufacturers to retailers is carefully calculated to represent the minimum needed to draw consumers' attention to the eye shadows.

B. For many consumer products the period of advertising discounted prices to consumers is about a week, not sufficiently long for consumers to become used to the sale price.

C. For cosmetics that are not newly introduced, the purpose of such promotions is to keep the products in the minds of consumers and to attract consumers who are currently using competing products.

D. During such a promotion retailers tend to accumulate in their warehouses inventory bought at discount; they then sell much of it later at their regular price.

E. If a manufacturer fails to offer such promotions but its competitor offers them, that competitor will tend to attract consumers away from the manufacturer's


Official Explanation



Correct Answer: D

The best answer is D. According to choice D, the promotion does not bring about increased sales to the consumer, but a hoarding of the product by the retailer.
Without the promotion, retailers would eventually buy the same numbers of the product at its full price, therefore, choice D supports the claim.
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Re: Shereen cosmetics sometimes discount the price of its premium eye shad   [#permalink] 23 Oct 2019, 21:16
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