Within Central City, the high-end retailer RiverRock makes most of its

Question

Within Central City, the high-end retailer RiverRock makes most of its sales at its flagship store in Central Plaza, a major commuter center in the business district. Nevertheless, marketing strategists at RiverRock propose increasing revenues by closing the lease on this high-rent location and focusing on its smaller satellite stores throughout the region.

Which of the following, if true, casts most doubt on the viability of the plan by RiverRock's marketing strategists to focus on smaller satellite stores?

(A) Most of the merchandise available at RiverRock's flagship store is also available at each of its satellite stores.

(B) The frequency with which consumers who live near Central Plaza shop at RiverRock is roughly equal to that of consumers who live in the suburbs, where most of the satellite stores are located.

(C) When RiverRock opened its flagship store fifteen years ago, it closed two smaller stores in the Central City area.

(D) Retailers such as RiverRock find that smaller suburban stores experience more consistent sales from year to year than do flagship stores, which depend on huge sales in November and December.

(E) The sales of the flagship RiverRock store allow the company to devote large sums to television advertising in Central City, which has a significant positive impact on satellite store sales.

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ManifestDreamMBA · Answer

Prethinking: Why would closing the flag ship store and focusing on its smaller satellite stores throughout the region not increase the rev. May be the Rev from the flagship store is much higher than the lease cost and this somehow helps the satellite stores

(A) Most of the merchandise available at RiverRock's flagship store is also available at each of its satellite stores.
 If that's the case, the sales should have been comparable already

(B) The frequency with which consumers who live near Central Plaza shop at RiverRock is roughly equal to that of consumers who live in the suburbs, where most of the satellite stores are located.
 If that's the case, the sales should have been comparable already

(C) When RiverRock opened its flagship store fifteen years ago, it closed two smaller stores in the Central City area.
 Doesn't matter. We are concerned about the present dynamics and how the closing would impact the sattelite stores now

(D) Retailers such as RiverRock find that smaller suburban stores experience more consistent sales from year to year than do flagship stores, which depend on huge sales in November and December.
 This supports the strategists by suggesting the sales are more predictable and probably steady in staleite stores vs flag-ship store, which sells a lot during Nov, Dec

(E) The sales of the flagship RiverRock store allow the company to devote large sums to television advertising in Central City, which has a significant positive impact on satellite store sales.
 This makes sense. Without the flagship store rev, the money for tv ads will be reduced or go away and impact the sattelite store sales

Gmat750aspirant · Answer

We need to determine which statement most weakens the marketing strategists’ plan to close the flagship store and focus on satellite stores.

(A) Most of the merchandise available at RiverRock's flagship store is also available at each of its satellite stores.
- This suggests that closing the flagship store may not significantly impact product availability, but it does not address the impact on overall sales.
- Does not weaken the argument.

(B) The frequency with which consumers who live near Central Plaza shop at RiverRock is roughly equal to that of consumers who live in the suburbs, where most of the satellite stores are located.
- This indicates that customer behavior is similar in both locations, implying that focusing on satellite stores might not negatively impact sales.
- Does not weaken the argument.

(C) When RiverRock opened its flagship store fifteen years ago, it closed two smaller stores in the Central City area.
- This is historical information about past store closures but does not directly challenge the current plan.
- Does not weaken the argument.

(D) Retailers such as RiverRock find that smaller suburban stores experience more consistent sales from year to year than do flagship stores, which depend on huge sales in November and December.
- This supports the idea that shifting focus to satellite stores may be a stable business decision.
- Strengthens the argument rather than weakens it.

(E) The sales of the flagship RiverRock store allow the company to devote large sums to television advertising in Central City, which has a significant positive impact on satellite store sales.
- This directly weakens the plan because it suggests that the satellite stores benefit significantly from the flagship store’s existence. If closing the flagship store reduces advertising, satellite stores could suffer, undermining the strategy.
- Strongly weakens the argument.

Conclusion 
Answer: E (The flagship store's revenue supports advertising that benefits satellite stores, casting doubt on the plan's viability).

NextstopISB · Answer

Correct Answer: (E)

(E) casts the most doubt on the plan by showing that the flagship store’s sales fund television advertising, which boosts sales at the satellite stores. Closing the flagship store could reduce advertising and hurt overall revenue.

Why other options are wrong:
(A) If merchandise is available in both locations, it does not indicate whether closing the flagship store will impact sales. 
(B) Equal shopping frequency does not address whether flagship store sales drive overall revenue. 
(C) Past closures do not indicate how current store performance will be affected. 
(D) Consistent sales at smaller stores do not mean they will generate more revenue than the flagship store.

ManifestMBAbay25 · Answer

Premise - RR flagship store in Central plaza is most successful in terms of sales. 
Conclusion - The marketing strategists want to increase the rev by closing this flagship store as the rents are high and want to focus on smaller stores.

It is a "weaken the argument" question. What will make the strategist's argument to fail

(A) Most of the merchandise available at RiverRock's flagship store is also available at each of its satellite stores. - this proves that flagship store is not adding any value inventory wise. its a strengthener.  Incorrect

(B) The frequency with which consumers who live near Central Plaza shop at RiverRock is roughly equal to that of consumers who live in the suburbs, where most of the satellite stores are located. - this compares the number of consumers in both the locations and proves that they are almost equal. so if the flagship store closes the no. of consumers can be maintained with the satellite stores.  Incorrect

(C) When RiverRock opened its flagship store fifteen years ago, it closed two smaller stores in the Central City area. - doesnt add any information related to the reasoning of the strategist.  Incorrect

(D) Retailers such as RiverRock find that smaller suburban stores experience more consistent sales from year to year than do flagship stores, which depend on huge sales in November and December. - this compares both kinds of stores in terms of sales and proves that the satellite stores are better. again a strengthener.  Incorrect

(E) The sales of the flagship RiverRock store allow the company to devote large sums to television advertising in Central City, which has a significant positive impact on satellite store sales. - this gives a reason why the flagship store is important and its impact on the satellite stores. Weakener -  Correct

Bunuel · Answer

Official Explanation
     
Answer: E   This is a weaken question. The goal of the plan is to increase revenues; the marketing strategists believe this will happen by closing the flagship store and focusing on smaller satellite stores. The underlying assumption is that the high rent of the flagship store (and, perhaps, other costs associated with maintaining the location) is not worth the resulting revenues. Consider each choice in turn:

(A) This choice suggests that the satellite stores are capable of doing everything the flagship store can do, so it doesn't cast doubt on the plan.

(B)There's no apparent distinction between the flagship stores and the satellite stores here; there's nothing directly relevant to revenues.

(C) This choice is also not directly relevant. It suggests there is some connection between opening flagship stores and opening satellite stores, but it's not clear what that has to do with revenue.

(D)This would seem to strengthen the plan, if anything; the satellite stores are more consistent than the flagship. However, it still isn't directly relevant: Consistency doesn't necessarily translate into higher revenues.

(E)This is correct. It shows that the revenues of the satellite stores are dependent on the results of the revenues of the flagship store. If the flagship store were closed, the revenues of the satellite stores would likely be affected.

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