Bunuel
When the company released its flagship product in 1988, they had already built a worldwide distribution system comprising six geographical regions based on customer demand for its existing catalogue.
(A) they had already built a worldwide distribution system comprising six geographical regions based on customer demand for
(B) they already had built a worldwide distribution system comprising six geographical regions that was based on customer demand made of
(C) they already had built a worldwide distribution system that comprised six geographical regions based on demand by customers for
(D) it had already built a worldwide distribution system that comprised six geographical regions based on customer demand for
(E) it already had built a worldwide distribution system comprising six geographical regions being based on customer demand it had for
OFFICIAL EXPLANATION
D
The first issue in the initial sentence is the word "they". The subject of the sentence is "the company", which is singular. "It" is correct, eliminating (A), (B), and (C).
Two key differences between (D) and (E) are "being based" versus 'based", and "demand for" versus "demand it had for". When in doubt, go with the shorter answer, but we can be more specific here. "Being" is almost never correct, and is certainly not correct when it isn't necessary. "It had" is vague, as "it" could refer to the company (as it does earlier in the sentence) or the distribution system. Choice (D) is correct.