GMAT Critical Reasoning
A factory was trying out a new process for producing one of its products, with the goal of reducing productioncosts. A trial production run using the new process showed a 15 percent reduction in costs compared with pastperformance using the standard process. The production managers therefore concluded that the new processdid produce a cost savings.
Which of the following, if true, casts most doubt on the production manager's conclusion?
- A In the cost reduction project that eventually led to the trial of the new process, production managers had initially been seeking cost reductions of 50 percent.
- B Analysis of the trial of the new process showed that the cost reduction during the trial was entirely attributable to a reduction in the umber of finished products rejected by quality control.
- C While the trial was being conducted, production costs at the factory for a similar product, produced without benefit of the new process, also showed a 15 percent reduction.
- D Although some of the factory's managers have been arguing that the product is outdated and ought to be redesigned, the use of the new production process does not involve any changes in the finished product.
- E Since the new process differs from the standard process only in the way in which the stage of production are organized and ordered, the cost of the materials used in the product is the same in both processes.
Correct Answer: C