GMAT Critical Reasoning
An eyeglass manufacturer tried to boost sales for the summer quarter by offering its distributors a special discount if their orders for that quarter exceeded those for last year's summer quarter by at least 20 percent.Many distributors qualified for this discount.Even with much merchandise discounted, sales increased enough to produce a healthy gain in net profits.The manufacturer plans to repeat this success by offering the same sort of discount for the fall quarter.
Which of the following, if true, most clearly points to a flaw in the manufacturer's plan to repeat the successful performance of the summer quarter?
- A In general, a distributor's orders for the summer quarter are no higher than those for the spring quarter.
- B Along with offering special discounts to qualifying distributors, the manufacturer increased newspaper and radio advertising in those distributors' sales areas.
- C The distributors most likely to qualify for the manufacturer's special discount are those whose orders were unusually low a year earlier.
- D The distributors who qualified for the manufacturer's special discount were free to decide how much of that discount to pass on to their own customers.
- E The distributors' ordering more goods in the summer quarter left them overstocked for the fall quarter.
Correct Answer: E