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Nez
The chief accountant of Grix Inc., a crop and livestock development company, reported to management that the pilferage level is negatively affecting the profit levels of Grix Inc. She suggested that more secured stocking technique be used to protect the company's stock against future possible pilferage. The company decided against her suggestion and instead took the advice of the business development manager, who suggested that a new cost effective design that triples only output and increases sales every two years be used to increase profit and in effect offset the effect of pilfering on the company's profit. After 4 years the pilferage level in Grix Inc caused Grix Inc. to go into administration.

The answers to the following questions, EXCEPT one, will be useful in deciding whether the Chief accountant's suggestion would have prevented Grix Inc. from going into administration, if her suggestion was implemented?

A. Do Grix Inc. employees pilfer?
B. Do rabbits Pilfer?
C. What is the pilferage level in the industry?
D. Is there a secure stocking technique that protects against pilferage?
E. Was Grix Inc. stock room attacked by robbers who stole almost all their goods?

Question from a local GMAT school. I doubt these local guys but I was taken by the explanation offered in this question. It was simply great. I'll post the explanation later if no genius here don't explain it before I do.

Its an evaluate question so we will answer yes or no---if we have 2 different answers on yes and no then its a proper evaluation.
opt. A--do employees pilfer---if yes then her method could be useful---if no then its not
opt B--its the same as option A,here instead of people we have rabbit.maybe the stocks are piled with rabbits.
opt. C--what is pilf level in industry---if its already high then it wont help---if its low and if people have followed her, the results were good.
opt. D--is there any secure stocking---if yes then she was talking about it---if no then the company has to fall
opt. E--if its attached to robbers then its not related to the argument because then its an accident and we will not talk about pilf here.
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Thanks all.
Janielle stands out with her explanation.
Here I go with mine
THE ACCOUNTANT SUGGESTED A MORE SECURE STOCKING TECHNIQUE
A. Do Grix Inc. employees pilfer?
IF THEY DO, THEN BETTER SECURITY MIGHT STOP THEM
B. Do rabbits Pilfer?
BETTER SECURITY IF IT EXISTS MIGHT STOP RABBITS FROM PILFERING. BTW RABBITS ARE LIVESTOCKS AND WE ALL THEY WERE PART OF WHAT DOUBLED UP.
C. What is the pilferage level in the industry?
IF THE PILFERAGE LEVEL IS KNOWN THEN GRIX COULD EASILY COMPARE IT WITH THEIRS AMD HENCE DECIDE WHICH OF THE TWO ADVICE TO HEED. IF SIMILAR TO THEIRS OR HIGHER, THERE IS A CHANCE GRIX NEEDS TO UP ITS REVENUE AND OFFSET THE EFFECT OF PILFERAGE ON PROFIT ACCOUNT. IF INDUSTRY LEVEL IS FAR BELOW GRIX'S THEN GRIX MIGHT NEED TO REDUCE PILFERAGE. ACCOUNTANT'S SUGGESTION MIGHT HELP.
D. Is there a secure stocking technique that
protects against pilferage?
THAT'S WHAT SHE SUGGESTED. IF THERE IS, THEN GRIX IS GOOD TO GO.
E. Was Grix Inc. stock room attacked by robbers
who stole almost all their goods?
WHILE THIS IS NOT PILFERAGE, HOW DO WE TELL THAT THE ACCOUNTANT'S SUGGESTION, IF IMPLEMENTED, WOULDN'T HAVE SECURED THE STOCK FROM THE ROBBERS?

"ATTACKED" is the let off for E.
The accountant didn't mention or imply the technique will protect against an "attack".

Another let off for E.
If the robbers made away with most of the goods which we assume even doubled up twice in the four years, we can say chances are high they also have the capacity to damage or neutralize any security employed against mere pilferage.

If the answer is NO, let's say there was no robbery to start off with. Then we need to assume it was the doubling up off pilfering livestock that ate off other stock at an eating-up rate significantly more than the doubling up rate of the eaten-up stock(say grain), to necessitate a management dissolution. Then option E would be significant.

But that was not stated. It wasn't even stated that Grix's output even doubled as planned.

E won by a tight margin.

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