A manufacturer can only recoup its retooling costs for redesigning a

Question

A manufacturer can only recoup its retooling costs for redesigning a product if it sells enough of the product to its distributors to pass its break-even point. Unless retail companies believe the product will sell well, however, they will not buy enough of the product from distributors to enable the manufacturer to recoup its costs. Manufacturers are more likely to retool products if the products have scored favorably in market studies or if large advance orders for the redesigned products have come in before the retooling process is started, or both.

Of the following selections, which one can be appropriately inferred from the above passage?

(A) If a manufacturer receives large advance orders for the redesigned product from its distributors, it will recoup its retooling costs.

(B) Retail companies that stock products based on favorable market studies will sell a lot of products.

(C) A manufacturer that has recouped its retooling costs has sold enough of the redesigned product to pass its break-even point.

(D) A manufacturer that did not get many advance orders for a redesigned product did not make a profit.

(E) A manufacturer that had enough sales of a redesigned product to pass its break-even point by a wide margin did not make a profit on its sale of the product.

winterschool · Answer

A manufacturer can only recoup its retooling costs for redesigning a product if it sells enough of the product to its distributors to pass its break-even point. Unless retail companies believe the product will sell well, however, they will not buy enough of the product from distributors to enable the manufacturer to recoup its costs. Manufacturers are more likely to retool products if the products have scored favorably in market studies or if large advance orders for the redesigned products have come in before the retooling process is started, or both.

Of the following selections, which one can be appropriately inferred from the above passage?

(A)  If a manufacturer receives large advance orders for the redesigned product from its distributors, it will recoup its retooling costs.   Correct

manufacturer assume it can recoup it retooling cos, so they started retooling process

(B) Retail companies that stock products based on favorable market studies will sell a lot of products.  Incorrect

it talks about retailers

(C) A manufacturer that has recouped its retooling costs has sold enough of the redesigned product to pass its break-even point.  Incorrect

already know from argument

(D) A manufacturer that did not get many advance orders for a redesigned product did not make a profit.  Incorrect

only know about retooling cost, profit is irrelevant, many advance orders not needed, one large advance order is enough for recoup cost

(E) A manufacturer that had enough sales of a redesigned product to pass its break-even point by a wide margin did not make a profit on its sale of the product.  Incorrect

it cant be inferred from argument

LipiSinha · Answer

A. No. The argument says, "A manufacturer can only recoup its retooling costs for redesigning a product if it sells enough of the product to its distributors to pass its break-even point". This contains no information on the no. of orders required to recoup the retooling costs.

B. This is irrelevant. The argument is based upon a manufacturer recouping his retooling costs. This has no relation to what products retail companies stock.

C. is the correct answer. The argument says, "A manufacturer can only recoup its retooling costs for redesigning a product if it sells enough of the product to its distributors to pass its break-even point". This choice affirms this statement.
 
D. The number of orders required is not mentioned. Also, there is no mention of profit-making the argument.

E. If the sales of a product passes its break-even point by a wide margin, how can it not make a profit? This statement is contradictory in itself.

wontym · Answer

A, B : No. 
We need to focus on words "more likely to" in this argument. This means we can not use "will".

D,E : irrelevant
C : correct. Because of the words "can only recoup".

Posted from my mobile device

DinoPen · Answer

A manufacturer can only recoup its retooling costs for redesigning a product if it sells enough of the product to its distributors to pass its break-even point. Unless retail companies believe the product will sell well, however, they will not buy enough of the product from distributors to enable the manufacturer to recoup its costs. Manufacturers are more likely to retool products if the products have scored favorably in market studies or if large advance orders for the redesigned products have come in before the retooling process is started, or both.

Of the following selections, which one can be appropriately inferred from the above passage?

Recoup costs if sell product
Retailers need assurances to sell additional product before purchasing more from manufacturer.
What can we infer here?

(A) If a manufacturer receives large advance orders for the redesigned product from its distributors, it will recoup its retooling costs.
 Even if the manufacturer were to receive a large advance order, it does not mean a guarantee that the manufacturer will break even on its costs.

(B) Retail companies that stock products based on favorable market studies will sell a lot of products.
 Favorable market studies does not lead to a definitive prediction in the real world market.
 
(C) A manufacturer that has recouped its retooling costs has sold enough of the redesigned product to pass its break-even point.
 Yes. We can infer this since in the passage, it mentioned that the only way to Break even is to sell enough product to get to that point.
 
(D) A manufacturer that did not get many advance orders for a redesigned product did not make a profit.
We can't infer this. Not receiving a lot of advance orders does not make it true that the manufacturer will not break even or make a profit.

(E) A manufacturer that had enough sales of a redesigned product to pass its break-even point by a wide margin did not make a profit on its sale of the product.
 We are looking for break even points. Not necessarily whether a product has made a profit.

yashasvi3 · Answer

Can someone please explain why A is not the answer, as both A and C repeat the statements in the argument?

750rest · Answer

Read it carefully "Manufacturers are more likely to retool products" it says more likely no guarantee is there.

VerbalBot · Answer

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A manufacturer can only recoup its retooling costs for redesigning a

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A manufacturer can only recoup its retooling costs for redesigning a

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