A manufacturer adds 11.1% margin when shipping articles to wholesaler,

Question

A manufacturer adds 11.1% margin when shipping articles to wholesaler, who in turn adds 16.67% when shipping to retailer. The retailer’s margin is 37.5% but due to Diwali; he gives a discount of 10% on the listed price. The effective distributorship margin from manufacturing to end customer, is closest to

(A) 64%
(B) 55%
(C) 72%
(D) 40%
(E) 60%

Show Answer

Official Answer

E

(A) 64% 
(B) 55% 
(C) 72% 
(D) 40% 
(E) 60%

Princ · Answer

OA:E

Manufacturer--> Wholesaler
 100 --> 100+.111*100 =111.1
 
Wholesaler ---> Retailer
 111.1 --->111.1+0.1667*111.1=111.1*1.1667=129.62

Retailer ----> Customer 
129.62 ----> 129.62+0.375*129.62=129.62*1.375 =178.23

After 10% discount on Diwali, price to customer = 178.23 - 0.1*178.23=178.23*0.9=160.41

The effective distributorship margin from manufacturing to end customer, is closest to 160.41 -100= 60%

globaldesi · Answer

Let the initial price be 100
hence
 (\frac{11}{10})*(\frac{7}{6})*(\frac{11}{8})*(\frac{9}{10})*100

total is approximately 159 which is near to option E 60% over 100

Digvijay123 · Answer

Actually if we do it with all the decimals the calculation will be very hectic so lets do it by approximation-
Lets take the cost to be 100, lets add the manufacturer's margin as 110 instead of 111.1 to make the calculation for next part easy

now add wholesaler's margin and instead 16.67% add 17% which will make the calculation as 110*17/100 instead of 111.1*16.67/100..approximation one is far easier right?
now add that to 110, which will give us approx. 19, so after adding we have 129.

Again for easier calculation make that 129--> 130, and now calculate the margin of retailer use 37 or 38 whatever instead of 37.5...
now 37% of 130 will be around 50 now adding 50 to 130 that gives us 180....

wait its not over yet we also have to deduct diwali discount of 10% from it, so 10% of 180 is 18 after subtracting we have 162.

so margin here is approx 62% (162-100(cost price) = 62 which is 62% of 100)

now comes the interesting part as we mostly took the number greater than the actual number while approximation,
so the answer will be smaller than calculated amount i.e. 62, now see which option is just smaller than 62? its 60 right? so E is the answer

I hope you understood what I was trying to say...Thanks

CareerGeek · Answer

Let initial price = 1
Manufacturers price = 1 + 1/9 = 10/9
Wholesaler price = 10/9(1 + 1/6) = 10/9*7/6 = 35/27
Retailers price = 35/27*(1 + 3/8) = 385/216
Price after discount = 385/216*90/100
= 38.5/24 = 1.605 approx

Margin = 0.605*100 = 60% approx

Option E

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road740 · Answer

I solved this question by using smart numbers. 
Here´s my solution:

Since ...

0.111111... = 1/9
0.166666... = 1/6
0.375 = 3/8

... I started with the initial number 9*6*8 = 432

That way, putting 11.1% "on top" would be 432/9 = 6*8 = 48 "on top", so we end up with 432+48 = 480

The next step is +16.67%, so 480/6 = 80 --> 480 + 80 = 560

The next step is +37.5%, so 560 * 3 / 8 = 70 * 3 = 210 --> 770

Then, subtract 10%: 770 - 77 = 693

If 432 is 100% then 693 is:

693 * 100 / 432 = 160.(something)

Now we know that the correct answer must be 60%.

bumpbot · Answer

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A manufacturer adds 11.1% margin when shipping articles to wholesaler,

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