A mattress company has two stores, one in City X and the other in City

Question

A mattress company has two stores, one in City X and the other in City Z. The company has advertised equally in newspapers in both cities, but has advertised twice as much on the radio in City Z as in City X. The two cities have similar populations and economies and the sales at each store have been roughly equal. A consultant claims this shows that the radio advertising has not improved mattress sales. In the table below, select changes that the company could make in City X and City Z, respectively, that together would probably be most helpful in testing the consultant’s claim. Make only two selections, one in each column.

ID: 100391

chetan2u · Accepted Answer

Newspaper advertising is similar in two cities but Radio advertising is more in Z as compared to X. Inspite of the excess advertising through radio, the sale has been roughly equal.

Consultant expects that more radio advertising should have resulted in more sales, and since that is not the case, he claims that radio advertising has not improved mattress sales.

We have to look for changes that can be done in the two cities to test the claim. Adding TV advertising or changing radio conents as also Doubling newspaper advertising adds new data and would make the analysis even more complex.

We are left with eliminate newspaper advertising or eliminate radio advertising.
Now, the sales could be dependent on newspaper advertising or radio advertising or some other third factor such as the efficiency of store incharges.

Incase we remove radio advertising and the sale still remains the same, then radio has not had any effect, and it could be any other factors but radio.
Incase we remove newspaper advertising and the sale still remains the same, then newspaper has not had any effect, and it could be due to advertising on radio or some other factor.

Hence eliminating radio advertising is correct.

Yeetyeti38 · Answer

Is there an OE for this?

SnorLax_7 · Answer

Hi  chetan2u   Sajjad1994   GMATCoachBen

Kindly can you confirm if the answer posted here is correct and reasoning behind it ?

Thanks !

GMATCoachBen · Answer

SnorLax_7  The answer is wrong. Good call to check! Haha, some of these are pretty hard, but 5% accuracy so far is suspicious.

chetan2u  do you want to edit the OA?

Here's the official answer and explanation, from the OG 2024 "hards":

Fish181 · Answer

sorry about that! Answers are updated.

Revets · Answer

The answer should be BB

In BB, we're isolating for radio ads. We have a single variable left. Thus we can tell directly whether or not an increased amount of radio ads increases sales metrics or not

For CC, we're left with newspapers. We don't even know the potential interactions between newspapers and radio ads, and I don't believe we can obviously gleam this to be the correct answer without some outside assumptions of there being no intermixing influence

BB makes more sense, the OA explanation does not do a good job explaining why CC is the right answer and I would still disagree

TheVDR · Answer

Consider Newspaper contribution to be "a", Radio contribution to be "y" and all other contributions to be "P". For City X, total contribution would be (a + y + kP)  . Similarly, for City Y, total contributioj would be (a + 2y + qP).

We are told that,
(a + y + kP) = (a + 2y + qP)

and we are asked that will the equation still hold when either a = 0 (Answe BB) OR y = 0 (Answer CC)

Clearly, putting y = 0 will give the context whether the equation holds or not.
Putting a = 0 will lead to requiring more context.

Hence, eliminating Radio Advertising is the only way to precisely estimate whether it was effective in the first place or not.

Gemmie · Answer

Consultant's Claim:  The consultant claims that radio advertising has not improved mattress sales because sales were similar despite double the radio advertising in City Z compared to City X.

Testing the Claim:  To test this claim, we need to see if radio advertising has a significant impact on sales compared to no radio advertising.

By eliminating radio advertising in both cities, we create a scenario where any differences in sales can be attributed to the absence of radio advertising, thus effectively testing the consultant's claim.

City X: Eliminate radio advertising 
 City Z: Eliminate radio advertising

yipmewmew · Answer

GMATCoachBen  here the option of changing the content of the radio is wrong because if we change the content for both cities and the sales stay the same, we still wont be able to separete the effect of the radio on sales right? I read through the explanation in your screenshot, it wasnt very clear to understand. Hence, requesting you to weigh in here.

vijayakrishnan · Answer

i agree. i am in the same boat. i selected "eliminate newspaper advertising" for city x and "eliminate radio advertising" for city y. Now we only have radio for city X and newspaper for city Y. Given that all the other factors are the same between the two cities, in this scenario you'd expect city X to have very low sales compared to city Y.

Adarsh_24 · Answer

If radio is removed from both and sales remain same then radio doesn’t have any effect on the sales.

Question is not saying the double is not causing any effect , right? Rather radio didn’t have any effect at all regardless of its amount.

tommychudw · Answer

Through this, I found out that you can select the same option for both selections. Nicely, better now than later.

adv95 · Answer

While changes to the newspaper or television advertising strategy may affect mattress sales, those changes would not necessarily clarify the effect radio advertising has had on mattress sales. Even if changing the content of the radio advertising in either city were to bring about an increase in mattress sales, it may not be possible to determine if the consultant’s claim was correct. If the previous content had a negligible or a positive effect on sales, then an increase in sales coinciding with the change of content would be evidence that the consultant’s claim is incorrect. On the other hand, if the previous content had a negative effect on sales, then the new content may simply have had less of a negative effect. The best way to determine if radio advertising does not improve mattress sales is to eliminate radio advertising in both cities. Any change in sales may be attributed to the radio advertising, indicating whether the consultant’s claim was correct. If there was no change, the consultant’s claim would be strongly supported.
City X: The correct answer is Eliminate radio advertising. 
City Z: The correct answer is Eliminate radio advertising

City X	City Z
		Double newspaper advertising
		Eliminate newspaper advertising
		Eliminate radio advertising
		Change the content of radio advertising
		Add television advertising

A mattress company has two stores, one in City X and the other in City

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A mattress company has two stores, one in City X and the other in City

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