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When Internet and catalog retailers are excluded, retail productivity

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When Internet and catalog retailers are excluded, retail productivity  [#permalink]

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When Internet and catalog retailers are excluded, retail productivity in the United States, measured in terms of revenue per dollar spent on employee salaries, increased more than 20 percent during the 1990s. When the productivity changes of individual stores are tracked from the beginning of the decade to the end, however, very few stores show greater than a 10 percent gain, none had more than a 15 percent gain, and many show only very small gains.

On the basis of the information given, which of the following can most properly be concluded about retailing in the United States in the 1990s?


A. The individual stores whose productivity increased the most tended to be those that had the highest sales revenue.

B. Most of the gain in retail productivity resulted from some combination of the closing of inefficient stores and the opening of new, efficient ones.

C. The gains in retail productivity were concentrated in the beginning of the decade, with much larger annual gains in the first few years than in the last few.

D. Increases in retail productivity were lower for Internet and catalog retailers than they were for other retailers.

E. After adjusting for inflation, the aggregate amount spent annually by retailers on salaries was lower at the end of the 1990s than it had been at the beginning.

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Originally posted by gmatbull on 30 Oct 2012, 06:10.
Last edited by Bunuel on 25 Sep 2018, 04:52, edited 1 time in total.
Renamed the topic, edited the question and added the OA.
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Re: When Internet and catalog retailers are excluded, retail productivity  [#permalink]

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New post 30 Oct 2012, 13:37
1990's: internet and catalog retailers excluded, Retail productivity(RP) increased 20%
Productivity changes for stores: few > 10%; none was >15%; many show small gains.

What can we assume on the basis of the information provided before delving into the ans?
I don't even understand what the passage is saying.....

Could someone pls explain?
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Re: When Internet and catalog retailers are excluded, retail productivity  [#permalink]

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New post 30 Oct 2012, 21:11
1
Given:
Retail productivity (revenue per dollar spent on employee salaries) increased > 20% in 1990s
ie if a company has 1000 employees and each employee has 1000 dollars as salary then
Retail productivity = (Revenue/(1000 employees)*(1000 dollars))*100

Breakdown of increase in RP is shown at the end of the decade.

Since the RP has shown a downward trend, what can be inferred from the information above.

A. The individual stores whose productivity increased the most tended to be those that had the highest sales revenue. - Not necessarily, Since RP depends on the employees and their salaries, increase in RP can be attributed to decrease in employees as well keeping the revenue constant - Incorrect
B. Most of the gain in retail productivity resulted from some combination of the closing of inefficient stores and the opening of new, efficient ones. - Information pertaining to closure of stores is out of scope - Incorrect
C. The gains in retail productivity were concentrated in the beginning of the decade, with much larger annual gains in the first few years than in the last few. - This information is already provided in the passage and nothing new or groud breaking information is implied here - Incorrect
D. Increases in retail productivity were lower for Internet and catalog retailers than they were for other retailers. - Since internet and catalog retailers are excluded from the study, this information is irrelevant - Incorrect
E. After adjusting for inflation, the aggregate amount spent annually by retailers on salaries was lower at the end of the 1990s than it had been at the beginning. - Spending lower amount on salaries implies lower employee strength or decrease in salaries of the existing employees. In each case this attributes to lower revenue in the later half decade in 1990s. Hence this is the right answer - Correct

A very good question. I would really like to know any other line of reasoning as well.

Thank you.
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Re: When Internet and catalog retailers are excluded, retail productivity  [#permalink]

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New post 31 Oct 2012, 01:23
@Sidhu09
"...productivity changes of individual stores are tracked FROM the beginning of the decade TO the end"
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Re: When Internet and catalog retailers are excluded, retail productivity  [#permalink]

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New post 31 Oct 2012, 10:05
A knowledge of the OA will probably be helpful in making a proper analysis.
Anyone please?

@Sidhu09
Even though u did not get the answer, i like the fact that you demonstrated an understanding
of the concept.

E: i think is wrong 'cos....for "productivity changes ...FROM the beginning of the decade TO the end":
few were >10%; none was >15%; and many show small gains...the passage did not say whether the
results were a trend from start to finish of the decade in the respective order stated.
Also, nowhere was "inflation" discussed; it only adjusted for "internet and catalogs"
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Re: When Internet and catalog retailers are excluded, retail productivity  [#permalink]

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New post 29 Dec 2012, 04:30
sidhu09 wrote:
Given:
Retail productivity (revenue per dollar spent on employee salaries) increased > 20% in 1990s
ie if a company has 1000 employees and each employee has 1000 dollars as salary then
Retail productivity = (Revenue/(1000 employees)*(1000 dollars))*100---- I think it is good to demonstrate the formula here, but it is helpless to solve this problem. The stimulus has nothing to do with salaries.Breakdown of increase in RP is shown at the end of the decade.

Since the RP has shown a downward trend, what can be inferred from the information above. Again, NO such downward trend is shown in the stimulus.

A. The individual stores whose productivity increased the most tended to be those that had the highest sales revenue. - Not necessarily, Since RP depends on the employees and their salaries, increase in RP can be attributed to decrease in employees as well keeping the revenue constant - Incorrect
B. Most of the gain in retail productivity resulted from some combination of the closing of inefficient stores and the opening of new, efficient ones. - Information pertaining to closure of stores is out of scope - Incorrect
C. The gains in retail productivity were concentrated in the beginning of the decade, with much larger annual gains in the first few years than in the last few. - This information is already provided in the passage and nothing new or groud breaking information is implied here - Incorrect
D. Increases in retail productivity were lower for Internet and catalog retailers than they were for other retailers. - Since internet and catalog retailers are excluded from the study, this information is irrelevant - Incorrect
E. After adjusting for inflation, the aggregate amount spent annually by retailers on salaries was lower at the end of the 1990s than it had been at the beginning. - Spending lower amount on salaries implies lower employee strength or decrease in salaries of the existing employees. In each case this attributes to lower revenue in the later half decade in 1990s. Hence this is the right answer - Correct

A very good question. I would really like to know any other line of reasoning as well.

Thank you.


I think the stimulus provides a paradox here. the retail industry shows 20% increase on RP during the 1990s. But indivisual retail companies tracks show: few gain 15%, few gain 10%, many gain a small increase. Then how the industry's 20% increase possible?

A and B are the contenders to solve this paradox.

A The individual stores whose productivity increased the most tended to be those that had the highest sales revenue. --Say 100 comanies, 10 of them increase by 40% and they have the highest sales revenue(50% of the revenue). Though a few gain more than 15%. 20% total increase of the industry is attainalbe. So I go for A.

B Most of the gain in retail productivity resulted from some combination of the closing of inefficient stores and the opening of new, efficient ones.--This also might lead the industry gain more than 20% increase. I am confused. NEED Official Explanations.
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Re: When Internet and catalog retailers are excluded, retail productivity  [#permalink]

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New post 23 Feb 2013, 02:09
A. The individual stores whose productivity increased the most tended to be those that had the highest sales
revenue. Irrelevant
B. Most of the gain in retail productivity resulted from some combination of the closing of inefficient stores and
the opening of new, efficient ones. Indeed,Correct answer because in the decade 1800-1900 it decreased.However,in the year 1990 it increased.So,we need a reason to justify this .
C. The gains in retail productivity were concentrated in the beginning of the decade, with much larger annual gains
in the first few years than in the last few. Irrelevant
D. Increases in retail productivity were lower for Internet and catalog retailers than they were for other retailers.
Irrelevant,they are already excluded from survey
E. After adjusting for inflation, the aggregate amount spent annually by retailers on salaries was lower at the end of
the 1990s than it had been at the beginning.The passage talks about decade and not only year 1990
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Re: When Internet and catalog retailers are excluded, retail productivity  [#permalink]

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New post 04 Jul 2013, 21:19
2
We are given two premises that seem contradicting and we are asked to derive a conclusion

Premise 1: When Internet and catalog retailers are excluded, retail productivity in the United States, measured in
terms of revenue per dollar spent on employee salaries, increased more than 20 percent during the 1990s.

Premise 2: When the productivity changes of individual stores are tracked from the beginning of the decade to the end,
however, very few stores show greater than a 10 percent gain, none had more than a 15 percent gain, and
many show only very small gains.

Pre-thinking: overall there was a 20% increase in productivity. However, when tracking individual stores, none showed more than a 15% increase and very few showed an increase of more than 10%. There can be 3 reasons that can help resolve the paradox:

1. Some stores with low productivity were closed, thereby raising the "average" productivity per store
2. Some stores with higher productivity were introduced, thereby raising the "average" productivity per store
3. Most of the stores that showed an increase in productivity were those that had the highest productivity, therefore their "contribution" to the overall productivity would add to 20%

Now let's examine the answer choices:

A. This answer choice tries to explain the paradox using reason 3 above. However, the choice replaces "high productivity" with "high revenue." Remember that productivity is revenue/salary of employees. Therefore, it's not necessary that stores with the highest revenue are those who have the highest productivity. ELIMINATE.

B. This answer choice combines reasons 1&2 above. It matches them and the answer would explain the paradox and can be a conclusion. THIS IS THE RIGHT ANSWER

C. We are told about the overall gain, therefore we cannot conclude whether the gain was concentrated I. The beginning of the decade. The question does not provide any support for this. ELIMINATE

D. The Internet and catalog retailers were only mentioned in the beginning of the passage, and they are excluded from the author's analysis. Therefore, we can't make any conclusion about them. ELIMINATE

E. This answer is too strong to be true. At best, it attempts to use reason 1 by saying that the some store with low productivity were closed. However, we cannot go from "some stores were closed" to "the overall salary was less" unless if we make some assumptions. Therefore, this answer is wrong. ELIMINATE

Answer: B
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Re: When Internet and catalog retailers are excluded, retail productivity  [#permalink]

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New post 04 Jul 2013, 23:41
@masoy --> A great explanation .. But I still have few queries..

When Internet and catalog retailers are excluded, retail productivity in the United States, measured in
terms of revenue per dollar spent on employee salaries, increased more than 20 percent during the 1990s.
When the productivity changes of individual stores are tracked from the beginning of the decade to the end,
however, very few stores show greater than a 10 percent gain, [i]none had more than a 15 percent gain,
and
many show only very small gains.[/i]

As per the argument none had more than a 15 percent gain then how can be the retail productivity increase more than 20%.

As per option B
B. Most of the gain in retail productivity resulted from some combination of the closing of inefficient stores and
the opening of new, efficient ones.


But creating new efficient stores with gain less than 15 %(because premise considers all the stores in the decade ) any way is not going to increase the productivity gain by 20%.

Please explain.. .
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Re: When Internet and catalog retailers are excluded, retail productivity  [#permalink]

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New post 05 Jul 2013, 00:00
The premise says that the stores were tracked from the beginning of the decade to the end of it. Therefore, it does not consider stores that were added or removed in between. Moreover, if a store opened in the middle of the 1990s, then you can't really talk about its productivity gain because the store did not exist in 1990.
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Re: When Internet and catalog retailers are excluded, retail productivity  [#permalink]

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New post 06 Jul 2013, 07:37
Why can't D be the answer. The author has specifically mentioned that the Internet and catalog retailers are excluded when we take the retail providers as a whole. Whereas when we read the second sentence, individual retail stores do include Internet and catalog retailers. And if we go by this logic then D sounds plausible.
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Re: When Internet and catalog retailers are excluded, retail productivity  [#permalink]

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New post 08 Jul 2013, 20:52
gmatbull wrote:
When Internet and catalog retailers are excluded, retail productivity in the United States, measured in
terms of revenue per dollar spent on employee salaries, increased more than 20 percent during the 1990s.
When the productivity changes of individual stores are tracked from the beginning of the decade to the end,
however, very few stores show greater than a 10 percent gain, none had more than a 15 percent gain, and
many show only very small gains.

On the basis of the information given, which of the following can most properly be concluded about retailing in
the United States in the 1990s?

A. The individual stores whose productivity increased the most tended to be those that had the highest sales
revenue.
Incorrect. There is no argument being made for individual stores

B. Most of the gain in retail productivity resulted from some combination of the closing of inefficient stores and
the opening of new, efficient ones.
The two premises, i.e. (A) retail productivity grew and (B) individual stores scored less in productivity gains esp the maximum was nearer 10% and one or two(poet!) 15% could lead to this conclusion but one may skip that for time choices as long as there is a right answer to follow - or in poetic terms it is still too long a road to travel for a CR question inference though in the new form it is sometimes shown in practce questions - treat with respect from afar

C. The gains in retail productivity were concentrated in the beginning of the decade, with much larger annual gains
in the first few years than in the last few.
a trick to catch you following the gradient of productivity scores mentioned into making you think time constrained

D. Increases in retail productivity were lower for Internet and catalog retailers than they were for other retailers.
There is no argument being made about Internet stores, all category is excluded.infact the category is catalog stores and internet stores

E. After adjusting for inflation, the aggregate amount spent annually by retailers on salaries was lower at the end of
the 1990s than it had been at the beginning.
Correct. A simpler inference than in B above and when provided as choice is the correct answer as it is a direct conclusion from the data points with or without stores being closed that you increased revenue per employee while 'productivity' was actually down because of falling sales

Pls explain..OA after discussions


OK Lights went out when I was first trying to complete the discussion so someone should think about saving drafts , ofcourse this is just a board but still.

Here is a standard new GMAT toughie where the problem has indeed required all gears clicking so you can move across multiple frames and especially that thankfully for you, most of the incorrect choices are easily excluded as I have added inline above:
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Re: When Internet and catalog retailers are excluded, retail productivity  [#permalink]

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New post 09 Jul 2013, 06:14
docdrizzeally wrote:
gmatbull wrote:
When Internet and catalog retailers are excluded, retail productivity in the United States, measured in
terms of revenue per dollar spent on employee salaries, increased more than 20 percent during the 1990s.
When the productivity changes of individual stores are tracked from the beginning of the decade to the end,
however, very few stores show greater than a 10 percent gain, none had more than a 15 percent gain, and
many show only very small gains.

On the basis of the information given, which of the following can most properly be concluded about retailing in
the United States in the 1990s?

A. The individual stores whose productivity increased the most tended to be those that had the highest sales
revenue.
Incorrect. There is no argument being made for individual stores

B. Most of the gain in retail productivity resulted from some combination of the closing of inefficient stores and
the opening of new, efficient ones.
The two premises, i.e. (A) retail productivity grew and (B) individual stores scored less in productivity gains esp the maximum was nearer 10% and one or two(poet!) 15% could lead to this conclusion but one may skip that for time choices as long as there is a right answer to follow - or in poetic terms it is still too long a road to travel for a CR question inference though in the new form it is sometimes shown in practce questions - treat with respect from afar

C. The gains in retail productivity were concentrated in the beginning of the decade, with much larger annual gains
in the first few years than in the last few.
a trick to catch you following the gradient of productivity scores mentioned into making you think time constrained

D. Increases in retail productivity were lower for Internet and catalog retailers than they were for other retailers.
There is no argument being made about Internet stores, all category is excluded.infact the category is catalog stores and internet stores

E. After adjusting for inflation, the aggregate amount spent annually by retailers on salaries was lower at the end of
the 1990s than it had been at the beginning.
Correct. A simpler inference than in B above and when provided as choice is the correct answer as it is a direct conclusion from the data points with or without stores being closed that you increased revenue per employee while 'productivity' was actually down because of falling sales

Pls explain..OA after discussions


OK Lights went out when I was first trying to complete the discussion so someone should think about saving drafts , ofcourse this is just a board but still.

Here is a standard new GMAT toughie where the problem has indeed required all gears clicking so you can move across multiple frames and especially that thankfully for you, most of the incorrect choices are easily excluded as I have added inline above:



The reason why I eliminated E is that it is not necessary the case that the overall salary has decreased, it may be that the revenue increased while the overall salary was the same. Whereas there is no way for the argument to make sense without introducing new stores that have a higher efficiency; hence choice B. Although I admit that the closing of inefficient stores is unnecessary, choice E requires more assumptions to be valid.


In the end, I think this question is not "air-tight" and therefore I don't believe it is an official question
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Re: When Internet and catalog retailers are excluded, retail productivity  [#permalink]

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New post 25 Sep 2018, 04:40
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GMATNinja broall chetan2u and daagh
I am convinced with OA but still want you guys to explain this in detail. I find the question good though!
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Re: When Internet and catalog retailers are excluded, retail productivity  [#permalink]

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New post 25 Sep 2018, 07:31
mahendru1992 wrote:
Why can't D be the answer. The author has specifically mentioned that the Internet and catalog retailers are excluded when we take the retail providers as a whole. Whereas when we read the second sentence, individual retail stores do include Internet and catalog retailers. And if we go by this logic then D sounds plausible.


mahendru1992 none of the data given includes internet and retail ==> thus, we can't conclude anything about them. they could be higher, lower, the same... The question is only relating to a disparity between two bits of data about non-internet&catalog stores.
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Re: When Internet and catalog retailers are excluded, retail productivity &nbs [#permalink] 25 Sep 2018, 07:31
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