Events & Promotions
|
|
GMAT Club Daily Prep
Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.
Customized
for You
Track
Your Progress
Practice
Pays
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.
Nov 2007:30 AM PST
-08:30 AM PST
Learn what truly sets the UC Riverside MBA apart and how it helps in your professional growth
Nov 2001:30 PM EST
-02:30 PM IST
Learn how Kamakshi achieved a GMAT 675 with an impressive 96th %ile in Data Insights. Discover the unique methods and exam strategies that helped her excel in DI along with other sections for a balanced and high score.
Nov 1912:30 PM EST
-01:30 PM EST
Learn how Keshav, a Chartered Accountant, scored an impressive 705 on GMAT in just 30 days with GMATWhiz's expert guidance. In this video, he shares preparation tips and strategies that worked for him, including the mock, time management, and more
Nov 2211:00 AM IST
-01:00 PM IST
Do RC/MSR passages scare you? e-GMAT is conducting a masterclass to help you learn – Learn effective reading strategies Tackle difficult RC & MSR with confidence Excel in timed test environment- Nov 23
11:00 AM IST
-01:00 PM IST
Attend this free GMAT Algebra Webinar and learn how to master the most challenging Inequalities and Absolute Value problems with ease. 
Nov 2407:00 PM PST
-08:00 PM PST
Full-length FE mock with insightful analytics, weakness diagnosis, and video explanations!
Nov 2510:00 AM EST
-11:00 AM EST
Prefer video-based learning? The Target Test Prep OnDemand course is a one-of-a-kind video masterclass featuring 400 hours of lecture-style teaching by Scott Woodbury-Stewart, founder of Target Test Prep and one of the most accomplished GMAT instructors.
Updated on: 31 May 2024, 06:43
Originally posted by betterscore on 07 Aug 2012, 14:43.
Last edited by Bunuel on 31 May 2024, 06:43, edited 2 times in total.
Last edited by Bunuel on 31 May 2024, 06:43, edited 2 times in total.
Kudos
Bookmarks
D
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
15%
(low)
Question Stats:
80% (01:45) correct
20%
(02:10)
wrong
based on 12478
sessions
History
Date
Time
Result
Not Attempted Yet
The Maxilux car company's design for its new luxury model, the Max 100, included a special design for the tires that was intended to complement the model's image. The winning bid for supplying these tires was submitted by Rubco. Analysts concluded that the bid would only just cover Rubco's costs on the tires, but Rubco executives claim that winning the bid will actually make a profit for the company.
Which of the following, if true, most strongly justifies the claim made by Rubco's executives?
(A) In any Maxilux model, the spare tire is exactly the same make and model as the tires that are mounted on the wheels.
(B) Rubco holds exclusive contracts to supply Maxilux with the tires for a number of other models made by Maxilux.
(C) The production facilities for the Max 100 and those for the tires to be supplied by Rubco are located very near each other.
(D) When people who have purchased a carefully designed luxury automobile need to replace a worn part of it, they almost invariably replace it with a part of exactly the same make and type.
(E) When Maxilux awarded the tire contract to Rubco, the only criterion on which Rubco's bid was clearly ahead of its competitors' bids was price.
ID - CR04364
Which of the following, if true, most strongly justifies the claim made by Rubco's executives?
(A) In any Maxilux model, the spare tire is exactly the same make and model as the tires that are mounted on the wheels.
(B) Rubco holds exclusive contracts to supply Maxilux with the tires for a number of other models made by Maxilux.
(C) The production facilities for the Max 100 and those for the tires to be supplied by Rubco are located very near each other.
(D) When people who have purchased a carefully designed luxury automobile need to replace a worn part of it, they almost invariably replace it with a part of exactly the same make and type.
(E) When Maxilux awarded the tire contract to Rubco, the only criterion on which Rubco's bid was clearly ahead of its competitors' bids was price.
ID - CR04364
Maxilux Car Company
Step 1: Identify the Question
The wording justifies the claim in the question stem indicates that this is either a Strengthen question or an Explain the Discrepancy question. You’ll need to read the argument itself to determine which it is.
Step 2: Deconstruct the Argument
M’s new car has special tire design
R submitted bid for tires
Bid just covers cost, BUT: R will still profit?
The evidence in the argument doesn’t actually support the executives’ claim. Instead, their claim is surprising—it runs counter to the evidence, which suggests that Rubco will not make a profit. Since the argument includes a surprising claim, and the question asks you to justify that claim, this is an Explain the Discrepancy question.
Step 3: Pause and State the Goal
On Explain the Discrepancy questions, the argument will describe a surprising phenomenon, and the right answer will give a reason why that phenomenon occurred. In this case, the right answer will present a way in which Rubco might actually make a profit on the tire bid.
Step 4: Work from Wrong to Right
(A) This answer choice states that the spare tire on the Max 100 will also be a Rubco tire. However, the argument doesn’t make a connection between how many tires Rubco supplies, and what its profit is. It isn’t clear whether supplying more tires will increase Rubco’s likelihood of making a profit.
(B) The executives claim that winning the specific Max 100 bid will lead to a profit for Rubco. They don’t claim that Rubco will make a profit in general, or on its other contracts. So, this answer choice does not address the executives’ specific claim. Also, holding exclusive contracts doesn’t necessarily imply that Rubco will make a profit, since the answer choice doesn’t state whether these contracts are profitable.
(C) This answer choice seems to imply that the cost for Rubco to transport the tires will be relatively low. The argument already provides information about Rubco’s total costs: the bid only just covers them. Since you already know the relationship between Rubco’s costs and their bid amount, knowing that the transportation costs were low would only tell you that the bid may have also been low. This information doesn’t explain how the bid will be profitable.
(D) CORRECT. In the argument, the Max 100 is described as a luxury automobile. According to this answer choice, if consumers want to replace worn tires on a Max 100, they will almost invariably replace them with Rubco tires. By winning the bid, Rubco isn’t just winning the right to supply tires for the Max 100; it’s also winning the future business of Max 100 buyers. This explains why the executives believe that Rubco will make a profit.
(E) This may explain why the bid only just covers Rubco’s costs: offering the lowest cost was what enabled Rubco to win the bid. However, that isn’t what the question asks you to justify. It specifically asks for a justification of the claim made by Rubco’s executives.
Step 1: Identify the Question
The wording justifies the claim in the question stem indicates that this is either a Strengthen question or an Explain the Discrepancy question. You’ll need to read the argument itself to determine which it is.
Step 2: Deconstruct the Argument
M’s new car has special tire design
R submitted bid for tires
Bid just covers cost, BUT: R will still profit?
The evidence in the argument doesn’t actually support the executives’ claim. Instead, their claim is surprising—it runs counter to the evidence, which suggests that Rubco will not make a profit. Since the argument includes a surprising claim, and the question asks you to justify that claim, this is an Explain the Discrepancy question.
Step 3: Pause and State the Goal
On Explain the Discrepancy questions, the argument will describe a surprising phenomenon, and the right answer will give a reason why that phenomenon occurred. In this case, the right answer will present a way in which Rubco might actually make a profit on the tire bid.
Step 4: Work from Wrong to Right
(A) This answer choice states that the spare tire on the Max 100 will also be a Rubco tire. However, the argument doesn’t make a connection between how many tires Rubco supplies, and what its profit is. It isn’t clear whether supplying more tires will increase Rubco’s likelihood of making a profit.
(B) The executives claim that winning the specific Max 100 bid will lead to a profit for Rubco. They don’t claim that Rubco will make a profit in general, or on its other contracts. So, this answer choice does not address the executives’ specific claim. Also, holding exclusive contracts doesn’t necessarily imply that Rubco will make a profit, since the answer choice doesn’t state whether these contracts are profitable.
(C) This answer choice seems to imply that the cost for Rubco to transport the tires will be relatively low. The argument already provides information about Rubco’s total costs: the bid only just covers them. Since you already know the relationship between Rubco’s costs and their bid amount, knowing that the transportation costs were low would only tell you that the bid may have also been low. This information doesn’t explain how the bid will be profitable.
(D) CORRECT. In the argument, the Max 100 is described as a luxury automobile. According to this answer choice, if consumers want to replace worn tires on a Max 100, they will almost invariably replace them with Rubco tires. By winning the bid, Rubco isn’t just winning the right to supply tires for the Max 100; it’s also winning the future business of Max 100 buyers. This explains why the executives believe that Rubco will make a profit.
(E) This may explain why the bid only just covers Rubco’s costs: offering the lowest cost was what enabled Rubco to win the bid. However, that isn’t what the question asks you to justify. It specifically asks for a justification of the claim made by Rubco’s executives.
10 Aug 2012, 09:05
Kudos
Bookmarks
(D). Profit = Revenue - Cost. The premises show that revenue from Maxilux will equal cost. So to strengthen the argument, we need additional revenue from elsewhere. (B) is close because it generates additional revenue, but that revenue is also from Maxilux so the revenue will most likely not exceed the cost here either. (D) is the only answer choice that adds the kind of outside revenue stream we want.
31 Oct 2012, 03:53
Kudos
Bookmarks
davidfrank
Hii David.
An example will clear all your doubts regarding C.
The screen of Apple's phone iPhone are manufactured by Samsung. They won the bid in, I guess, 2005. Now had Samsung shifted its production facility to US, do you guarantee that it might have been beneficial. NO.Simply because there are several other factors to be looked such as wages. If you think that it could be compensated by less transportation costs, then you may be assuming that transportation costs are much higher.
IN STRENGTHENING QUESTIONS, THERE IS NO PLACE FOR ASSUMPTIONS. A simple No No.
Now in the same example, just even Samsung just covers its production cost, but whenever there is a need to replace the screen, the people will replace it with the same make and type. So people will stick over to this brand. Now Samsung, even if increases its prices, will certainly rule. Though its my opinion :D
Hope that helps.
-s
