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18 Apr 2010, 21:28
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A small orchard specializing in citrus fruits has been receiving fewer orders for oranges in the off season. Orchard owners expect demand to pick up in the coming weeks as harvest begins, but they are concerned about a neighboring orchard nearly three times their size. The neighboring orchard has announced plans to sell cases of oranges for 20% less than regular price in order to jump-start the season by attracting new business.
Which of the following, if true, points to the most serious flaw of the small orchard's plan to attract business by matching the prices of the competing orchard?
a) The small orchard has a dozen customers under contract to purchase the first oranges of the season and may anger them by not extending the discount to them.
b) The small orchard does not have time to advertise its oranges at lower prices.
c) The small orchard will reduce the number of oranges in each case to minimize losses incurred by matching prices.
d) The large orchard has a larger inventory and is more able to take losses on initially discounted oranges.
e) The large orchard will target a different market than the small orchard.
The OA is D, but I believe E is a better answer because:
This is a weaken question. In a weaken question, the answer choices are accepted as given, even if they include new information. The question even says that you must consider the information in each answer as true...
"Which of the following, if true, points to the most serious flaw of the small orchard's plan to attract business by matching the prices of the competing orchard?"
Therefore, in E, since the large orchard is targeting a different market, it will not have an effect on the small orchard's market and thus the small orchard should not provide a discount.
in D, the two orchard's markets are the same and the large orchard can take more losses than the small orchard.
Answer E provides a more compelling reason why the small orchards plan is flawed.
here is the reasoning from the OA which i feel is flawed:
Reasoning: Which point reveals the most serious flaw in the small orchard's plan? It can be determined from the passage that the large orchard has three times the inventory of the small orchard, and that they are looking to attract new business. It can also be inferred from the passage that the owners of the large orchard are confident that they are able to sell oranges at a discount and still remain solvent.
a) The concern of the orchards is in attracting new business, not satisfying existing customers. Additionally, customers under contract have likely already agreed to a non-discount price.
b) This item may be problematic, but does not address the concerns of the passage as a whole.
c)This approach is not a flaw in the plan, but a possible, potentially unethical, solution.
d)The large orchard's greater inventory will give them a flexibility that will outlast the small orchard. The small orchard could run out of stock before the large orchard has sold even a third of its oranges.
e)This item makes it sound as if the two orchards will not actually be in competition, but does not address the soundness of the small orchard's plan.
ah, but in a weaken question you MUST take the situation/info provided in each answer as TRUE and use that information as the basis to weaken what is provided in the stimulus.
In the explanation for e, it is saying that we should question the fact that the target markets will be different for each orchard... but this goes against the question which asks:
"Which of the following, if true, points to the most serious flaw of the small orchard's plan to attract business by matching the prices of the competing orchard?"
Which of the following, if true, points to the most serious flaw of the small orchard's plan to attract business by matching the prices of the competing orchard?
a) The small orchard has a dozen customers under contract to purchase the first oranges of the season and may anger them by not extending the discount to them.
b) The small orchard does not have time to advertise its oranges at lower prices.
c) The small orchard will reduce the number of oranges in each case to minimize losses incurred by matching prices.
d) The large orchard has a larger inventory and is more able to take losses on initially discounted oranges.
e) The large orchard will target a different market than the small orchard.
The OA is D, but I believe E is a better answer because:
This is a weaken question. In a weaken question, the answer choices are accepted as given, even if they include new information. The question even says that you must consider the information in each answer as true...
"Which of the following, if true, points to the most serious flaw of the small orchard's plan to attract business by matching the prices of the competing orchard?"
Therefore, in E, since the large orchard is targeting a different market, it will not have an effect on the small orchard's market and thus the small orchard should not provide a discount.
in D, the two orchard's markets are the same and the large orchard can take more losses than the small orchard.
Answer E provides a more compelling reason why the small orchards plan is flawed.
here is the reasoning from the OA which i feel is flawed:
Reasoning: Which point reveals the most serious flaw in the small orchard's plan? It can be determined from the passage that the large orchard has three times the inventory of the small orchard, and that they are looking to attract new business. It can also be inferred from the passage that the owners of the large orchard are confident that they are able to sell oranges at a discount and still remain solvent.
a) The concern of the orchards is in attracting new business, not satisfying existing customers. Additionally, customers under contract have likely already agreed to a non-discount price.
b) This item may be problematic, but does not address the concerns of the passage as a whole.
c)This approach is not a flaw in the plan, but a possible, potentially unethical, solution.
d)The large orchard's greater inventory will give them a flexibility that will outlast the small orchard. The small orchard could run out of stock before the large orchard has sold even a third of its oranges.
e)This item makes it sound as if the two orchards will not actually be in competition, but does not address the soundness of the small orchard's plan.
ah, but in a weaken question you MUST take the situation/info provided in each answer as TRUE and use that information as the basis to weaken what is provided in the stimulus.
In the explanation for e, it is saying that we should question the fact that the target markets will be different for each orchard... but this goes against the question which asks:
"Which of the following, if true, points to the most serious flaw of the small orchard's plan to attract business by matching the prices of the competing orchard?"
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kidchaos
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26 Sep 2010, 03:49
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I agree OA should be E it is definitely a more compelling reason why the plan would fail
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26 Sep 2010, 04:25
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kidchaos
OA seems to be correct. The option E actually helps the small company to increase the business.
E is not related with the reason of giving discounts? What if there are 10 more small companies? Then E will help it attracting more business.
Option D will actually hurt the small company as it might end up losing money.
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Hi there,
Archived GMAT Club Tests question - no more replies possible.
Where to now? Try our up-to-date Free Adaptive GMAT Club Tests
for the latest questions.
Still interested? Check out the "Best Topics" block above for better discussion and related questions.
Thank you for understanding, and happy exploring!
