A manufacturer of a certain product can expect that between 0.3 percen

Question

A manufacturer of a certain product can expect that between 0.3 percent and 0.5 percent of the units manufactured will be defective. If the retail price is $2,500 per unit and the manufacturer offers a full refund for defective units, how much money can the manufacturer expect to need to cover the refunds on 20,000 units?

(A) Between $15,000 and $25,000
(B) Between $30,000 and $50,000
(C) Between $60,000 and $100,000
(D) Between $150,000 and $250,000
(E) Between $300,000 and $500,000

(A) Between $15,000 and $25,000
(B) Between $30,000 and $50,000
(C) Between $60,000 and $100,000
(D) Between $150,000 and $250,000
(E) Between $300,000 and $500,000

Skywalker18 · Accepted Answer

Number of defective units is between = .3 % of 20000 and .5% of 20000
 = 60 and 100
Retail Price per unit = 2500 $
Expected price of refund is between = 2500 x 60 and 2500 x 100
 =1,50,000 and 2,50,000 dollars
Answer D

BASSLJ · Answer

Tried to use some quick thinking on this one.
1% of 20000 = 200 units
.5% = 100 units
.01% = 20 units

.01 x 3 = 20 x 3
.03% = 60

100 * 2500 = 250000
60*2500= 150000

Ans D

avigutman · Answer

Video solution from Quant Reasoning: Subscribe for more: https://www.youtube.com/QuantReasoning? ... irmation=1 https://www.youtube.com/watch?v=eO0prdNBMk8

camlan1990 · Answer

Units are expected to be defective: 0.3/100*20,000 => 0.5/100*20,000: 60 ~ 100

=> Between $150,000 and $250,000

Ans: D

NoHalfMeasures · Answer

(.5/100)*20,000*2,500=250,000. Only D has this as the higher limit. No need to calculate for .3%

alejandrogaleas · Answer

let x be the percent of the defective units
0.3<x<0.5
we can assume that x can be 0.4
since its 0.4 percent this would be  \frac{0.4}{100} 
0.4 percent of the 20,000 units given is the same as:

20,000* \frac{0.4}{100} = 80 units
 
so, about 80 units of the 20000 given will be defective, hence the manufacturer can expect to need to recover around:

80*2500= $200,000
since 200,000 fits in the $150,000 and $250,000 range.

Answer is D

HiLine · Answer

0.3 percent is 3 per thousand. 3 per thousand of 20 thousand is 3 x 20 = 60.

Lower bound for total price of defective units: 60 x 2.5 thousand = 150 thousand.

Thus D is the correct answer choice.

ahmedhammam · Answer

If you look at the answer format, you can easily notice that all maximum values are different (also calculating 0.5% will cancel out easier than 0.3%)

Thus maximum refund to expect = 0.5% x 2,500 x 20,000 = 250,000 
Answer D

Hint: 0.5% x 20,000 x 2500 = 0.5 x 20000 x 2500/100 = 10,000 x 25 = 250,000

kanusha · Answer

How much money need to cover for refund ?
Number of units = 20,000 units
cost = 2500$ / unit
0.3% of units = 3/1000 x 20,000 = 60 units defective 
0.5% of units = 5/1000 x 20,000 = 100 units defective
Between 60x2500$ = 150,000$
100x2500$ = 250,000$
D

ScottTargetTestPrep · Answer

If at least 0.3 percent of the 20,000 units are defective, then at least 0.3/100 x 20,000 = 60 units will be defective costing 60 x 2,500 = 150,000 dollars.

Since we see that 150,000 is the “low” number and only answer choice D has 150,000 as the low number, answer choice D must be correct.

Answer: D

dave13 · Answer

ok here is a quick method

remove all zeros 2,500 = 25 and 20,000 = 2 total number of units 25*2 = 50 now add remaining number of zeros ( add six zeros)

50, 000, 000 5*3 = 15 and 5*5 = 25 so answer is D

TheNightKing · Answer

All the upper limits are different (and easier to calculate).

20,000 Units. 1% is 200. 0.5% is 100 units.

Refund is full amount so 100*2500. That's 4 zeros.

Option E.

MHIKER · Answer

I don't how the experts will suggest but I want to calculate the either lower limit or the upper limit to save time. Because there is no second match for either limit. For example,

The Lower defective level is  20,000*\frac{3}{100*10}=60 ; the amount   60*2,500=150,000  only one match with the answer choice. (D)

The upper defective level is  \frac{20,000*5}{100*10}=100 ; the amount  100*2,500=250,000  only one match with the answer choice (D)

The answer is  D

GMATinsight · Answer

Answer: Option D

Video solution by  GMATinsight

https://www.youtube.com/watch?v=1brLnlLlVc4

charlie-23 · Answer

Number of units that can be defective is between
 \frac{0.3}{100}*20000 = 60  and
 \frac{0.5}{100}*20000 = 100

the retail price is $2,500 per unit

So, expected refunds is between
60*2500 = 150,000 and
100*2500 = 250,000

so, D is the answer.

bumpbot · Answer

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