In order to reduce weight and increase fuel efficiency, an automotive

Question

In order to reduce weight and increase fuel efficiency, an automotive manufacturer plans to replace the steel axles on its small fleet of compact vehicles with composite carbon-fiber axles. It currently makes the steel axles – which it will continue to use for trucks and SUVs – at its own factory, but is considering whether to manufacture the new carbon-fiber axles on its own or purchase them from a third-party supplier.

On the basis of the information provided, select “Manufacture” for the statement that, if true, would most strongly imply that the company should manufacture its own carbon-fiber axles and “Purchase” for the statement that, if true, would most strongly imply that the company should purchase those axles from a supplier.

Aryan19852 · Answer

The last option is anyway eliminated because we are not concerned about the cost of the axels. 1st options doesn't answers the questions whether to manufacture or outsource. And in 3rd it says if successful it might use for all vehicles but what about current it doesn't answers whether to make here or purchase

Oppenheimer1945 · Answer

Why the "Purchase" part cannot be E?  KarishmaB

kop18 · Answer

I think it's because if the raw material is expensive then the end cost of carbon axes will be high regardless of the means i.e, via production or supply. It's true that in-house price might be a little cheaper but it will be expensive anyway. There may not be a huge difference between the cost of the product if produced internally or supplied. On the other hand, in B - it says the largest suppliers have been able to make them affordably so definitely it gives us evidence that it will definitely be cheaper to purchase.

Does this make sense?

manrasingh · Answer

Why not (E) for Purchase?  Sajjad1994

benson2001 · Answer

why manufacture column can not choose   ?

PSKhore · Answer

If very few of the company's current suppliers are able to make them, it weakens the PURCHASE as well as the MANUFACTURE options

PSKhore · Answer

Because it will be expensive either way - PURCHASE or MANUFACTURE

Raome · Answer

Please help with this one

cheshire · Answer

Purchase:  “Carbon-fiber component production is prohibitively expensive in small and medium quantities, so only the largest suppliers have been able to produce them affordably.” 
 
Reasoning:
 If producing carbon-fiber axles in small quantities is extremely costly, it would not be economically feasible for the company to manufacture them in-house, especially since they only need them for a small fleet of compact vehicles. Also, large suppliers can leverage economies of scale, producing carbon-fiber axles at a significantly lower cost. Therefore, it would make the most financial sense for the company to purchase the axles from these suppliers instead of trying to produce them itself.

Manufacture:  “The manufacturer’s own engineering department designed the innovative technique for using carbon fibers in axles, a technique that the company would like to keep proprietary.” 
 
Reasoning:
 If the company developed a unique and innovative technique for making carbon-fiber axles and wishes to protect this proprietary knowledge, it would avoid outsourcing production to third-party suppliers. Manufacturing the axles in-house allows the company to maintain full control over its intellectual property and prevent competitors from accessing its proprietary methods.

dhruva09 · Answer

Sajjad1994   KarishmaB  Can you'll throw some light on why E won't be correct.
I was choosing B, but with the stipulation of quantities, which would be out of context, since there is no mention of production capacity, I chose E.

Bunuel · Answer

E isn’t correct because it’s about raw material cost, which affects both options equally. Whether the company makes or buys the carbon-fiber axles, the expensive material is a fixed factor, so it doesn’t tilt the decision either way.

B fits perfectly because the manufacturer plans to replace the steel axles only on its  small fleet  of compact vehicles. Producing in-house for such a small quantity would be uneconomical, while large suppliers that already operate at scale could offer lower per-unit costs. Hence, B supports  Purchase , not E.

dhruva09 · Answer

Thanks  Bunuel , this helps.

glagad · Answer

Can Someone help answer why A and C are incorrect for Manufacture?

My rationale for A -
 
- This could point at lack of availability for purchase options and hence Manufacturing could be an option

My rationale for C -

Company could very well want to expand the usage to other products in the future, and hence could be a rationale for it to stick to this reason.

Another blocker I felt for this question was there was almost nothing from the stimulus that could hint at why we should go for Manufacture/Purchase in some scenarions. This is contrary to the pattern I have observed in TPA questions, where there is some hint given to which option one should go for.

Bunuel · Answer

A: “Very few” does not mean “none”, some capable suppliers exist, so purchase remains feasible. The statement gives no in-house advantage on cost, quality, capacity, etc., so it’s weak for Manufacture.

C: It’s conditional and speculative. “If successful” and “will consider” do not create a present reason to manufacture. Even with future expansion, suppliers could scale. No immediate cost, capacity, quality, etc. rationale for in-house, so it’s weak for Manufacture.

Strongest manufacture reason is D (protect proprietary technique).

In order to reduce weight and increase fuel efficiency, an automotive

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Purchase	Manufacture
		Carbon-fiber drivetrain components, such as axles, are relatively new to the automotive industry and very few of the company’s current suppliers are able to make them.
		Carbon-fiber component production is prohibitively expensive in small and medium quantities, so only the largest suppliers have been able to produce them affordably.
		If the carbon-fiber axles prove to be successful in dramatically increasing fuel economy, the manufacturer will consider using the new axles on other vehicles it produces.
		The manufacturer’s own engineering department designed the innovative technique for using carbon fibers in axles, a technique that the company would like to keep proprietary.
		The raw materials required to produce carbon-fiber axles strong enough to support the weight of an automobile are currently much more expensive than the steel required for traditional axles.

GMAT Two-part Analysis (TPA) Questions

In order to reduce weight and increase fuel efficiency, an automotive

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