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Welcome back, Ron! Great to see you again. I agree with AndrewN, this question feels more GMAT-like than most unofficial problems, and as AndrewN points out, the crucial thing to focus on in any of these "proposed plan" questions is the goal of the plan. We only care about cutting costs. Answer D is clearly a good answer here. I find C a bit more tempting than I'd like it to be, though. We're not generally concerned with the quality of chicken meal here, but we are concerned with costs. If, because of the shorter shelf life of chicken meal, the manufacturer needs to discard more pet food before it can be sold, and if the manufacturer wants to bring the same total amount of food to market, then its costs could increase after it starts using chicken meal. If D weren't there, I'd think C was a tenuous but acceptable answer, though it requires so many assumptions that I'd pick D without questioning it if this question appeared on a test.
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Welcome back, Ron! Great to see you again. I agree with AndrewN, this question feels more GMAT-like than most unofficial problems, and as AndrewN points out, the crucial thing to focus on in any of these "proposed plan" questions is the goal of the plan. We only care about cutting costs. Answer D is clearly a good answer here. I find C a bit more tempting than I'd like it to be, though. We're not generally concerned with the quality of chicken meal here, but we are concerned with costs. If, because of the shorter shelf life of chicken meal, the manufacturer needs to discard more pet food before it can be sold, and if the manufacturer wants to bring the same total amount of food to market, then its costs could increase after it starts using chicken meal. If D weren't there, I'd think C was a tenuous but acceptable answer, though it requires so many assumptions that I'd pick D without questioning it if this question appeared on a test.

(D) If the proposed change is implemented, the resulting change in overall demand would cause the wholesale market price of chicken meal to rise.

but rise by how much? 1%, 20%? 50%? Sure, demand may increase the wholesale cost of chicken, but the argument is based on lowering cost. an small increase all the way up to <25% (1/.8) would still meet the company's plan of lowering the cost of the manufacture of dog food.

However, if the shelf life is shorter, then the risk of carrying spoilage increases, resulting in more chicken needed to replace it, and thereby increasing costs rather than saving costs (especially since demand cannot be 100% accurately determined, the amount food stored could vary, leading to potential spoilage if overstored)
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