In an effort to reduce its parcel delivery costs, an online retailer

Question

In an effort to reduce its parcel delivery costs, an online retailer partnered with stores in major cities to allow customers to pick up purchases at stores within one day of placing the order, as opposed to using the retailer’s expedited shipping service. In the year that followed, over 30% of purchases were fulfilled with the in-person pickup option. However, for that same year the retailer’s parcel delivery cost was up more than 10% over the previous year.

Which of the following, if true, best reconciles the discrepancy above?

A. Only certain products were eligible to be picked up at stores.

B. The ability to pick up purchases at stores was inconvenient for customers who did not live in major cities.

C. The retailer fulfilled over 60% more orders than it did the previous year.

D. The average cost of a parcel delivery was 10% higher than it was the previous year.

E. Parcel delivery costs increased year over year for the online retail industry as a whole.

winterschool · Answer

In an effort to reduce its parcel delivery costs, an online retailer partnered with stores in major cities to allow customers to pick up purchases at stores within one day of placing the order, as opposed to using the retailer’s expedited shipping service. In the year that followed, over 30% of purchases were fulfilled with the in-person pickup option. However, for that same year the retailer’s parcel delivery cost was up more than 10% over the previous year.

Which of the following, if true, best reconciles the discrepancy above?

A. Only certain products were eligible to be picked up at stores.  Incorrect

but picked up at stores was higher than previous years. cant explain the increased cost of delivery

B. The ability to pick up purchases at stores was inconvenient for customers who did not live in major cities.  Incorrect

some additional info

C.  The retailer fulfilled over 60% more orders than it did the previous year.   Correct

yes, if 30 increased for purchases that fulfilled with the in-person pickup option, other 30% should be for online purchase

D. The average cost of a parcel delivery was 10% higher than it was the previous year.  Incorrect

but if online purchase with home delivery was decreased than total parcels delivery cost could decreased

E. Parcel delivery costs increased year over year for the online retail industry as a whole.  Incorrect

same as D

Sushil117 · Answer

A. Only certain products were eligible to be picked up at stores.
we've info regarding products.this doesn't help .incorrect.

B. The ability to pick up purchases at stores was inconvenient for customers who did not live in major cities.
the whole idea was for major cities.so, this shouldn't affect the plan.inorrect.

C. The retailer fulfilled over 60% more orders than it did the previous year.
more delivery ,higher the cost of delivery .correct

D. The average cost of a parcel delivery was 10% higher than it was the previous year.
since 30% parcels were received at retailers', even at 10% increase parcel delivery cost should decline.incorrect

E. Parcel delivery costs increased year over year for the online retail industry as a whole
Out of scope.

IMO C

Pankaj0901 · Answer

Answer:  C

Say, total deliveries (previous year) = N = All Retailer's delivery

Next Year = N + 60%N = 1.6 N
In-person pickup = 30%
Retailer's delivery = 70% = 1.6 N x 70% = 1.12 N

So, Retailers delivery -> N (previous year) to 1.12 N (next year) => 10% higher (cost) than the previous year.  Answer C .

Bunuel · Answer

VERITAS PREP OFFICIAL SOLUTION:

In this Explain the Paradox problem, your goal is to reconcile the facts that 1) More than 30% of sales were fulfilled without parcel delivery (compared to 0% the year before) and 2) Parcel delivery costs were still up by 10%.

Think about ways that that could be true. What if:

-The cost of parcel delivery was way up, so they paid a lot more for each delivery, even if there were fewer deliveries total.

-The percentage of sales that required deliveries was down, but the number of sales was so high that the total number of deliveries was way up.

That type of thinking should lead you to answer choices (C) and (D). With (C), the correct answer, note that if overall sales were up over 60% while only about 30% of those sales were picked up in person, that would account for a more than 10% increase in shipping costs (technically the math would be 1.6 * 0.7 = 1.12--> a 60% increase in sales, 70% of which were fulfilled with parcel delivery, means a 12% increase in shipments).

With (D), note that the 10% increase in shipping cost per package doesn't offset the 30% reduction in the number of packages shipped. The general direction of the answer is on the right track (each shipment could have been more expensive) but the numbers don't work.

With (A) and (B), these factors are already factored in to the statistical evidence given. Even if only certain products could be picked up, or the pick-up process were inconvenient for people, you already know that more than 30% of sales were fulfilled that way, so you would expect the cost of fulfilling orders via delivery would still be down. And choice (E) misses the scope: the argument is only about this one company, for which you are given statistics that seem to be incompatible, so the general industry information doesn't change anything.

Fido10 · Answer

In what way those two facts should be reconciled : 1) More than 30% of sales were fulfilled without parcel delivery (compared to 0% the year before) and 2) Parcel delivery costs were still up by 10%.
Why are they opposed?
 KarishmaB , your help is needed on this one, I didn't understand this whole question neither its explanation? Can you help please

KarishmaB · Answer

Fido10  - This is what the question means:

An online retailer gave the option of 'next day store pickup' instead of expedited shipping (one day shipping). So people could pick up the order from the store instead of the retailer shipping it to them.
Now we are given that 30% purchases over the year were fulfilled by in person pickup (no shipping had to be done for that).
Still the overall shipping expense of the company increased by 10% over the year.

How could this happen? What if the retailer got many more orders this year? Say if they got 100 orders last year and shipped them all but they got 200 orders this year but shipped only 70% of them (i.e. 140), they would have still shipped more orders this year and hence would have spent more on shipping.
Or say the shipping rates doubled this year. Then even if they again got 100 orders, and shipped 70 of them, they may still end paying much more than last year.

A. Only certain products were eligible to be picked up at stores.

Doesn't matter. 30% products were still picked up at store.

B. The ability to pick up purchases at stores was inconvenient for customers who did not live in major cities.

Only 30% orders were store picked. Other deliveries went out as they do normally. It doesn't explain the increase in shipping costs.

C. The retailer fulfilled over 60% more orders than it did the previous year.

Correct. Now we know that if last year, the retailer fulfilled 100 orders, this year they fulfilled 160. So 70% of those will be 112 orders. So if last year they shipped all 100 orders, this year they shipped 112 orders. This would explain the 10% increase in shipping costs.

D. The average cost of a parcel delivery was 10% higher than it was the previous year.

This would explain the 10% increase in shipping costs if this year too 100 orders were shipped. But this year only 70 orders were shipped. So this doesn't explain the 10% increase in shipping cost.
If we are not given that the number of orders changed this year, we should evaluate this option assuming status quo i.e. the same number of orders were received this year too.

E. Parcel delivery costs increased year over year for the online retail industry as a whole.

This option tells us that shipping costs increased for the entire industry as a whole. It doesn't explain the discrepancy in our numbers.

Answer (C)

Fido10 · Answer

KarishmaB , Thank you so much for your answer
It's clear now but still have one misunderstood thing !
The passage said that "  OVER  30% of purchases were fulfilled with the in-person pickup option " that means that the percentage of the in-person pickup option could be 40%, 50% and either 100% !
if we assume it is 90%, and that last year, the retailer fulfilled 100 orders, this year then, according to C, they fulfilled 160. So 10% of those will be 16 orders. So if last year they shipped all 100 orders, this year they shipped 16 orders.

What is the discrepancy !
shouldn't the "Over" be removed from the passage, and keep only 30% ?!

Thank you so much

VerbalBot · Answer

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In an effort to reduce its parcel delivery costs, an online retailer

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In an effort to reduce its parcel delivery costs, an online retailer

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