198.
A factory was trying out a new process for producing one of its products, with the goal of reducing production
costs. A trial production run using the new process showed a 15 percent reduction in costs compared with past
performance using the standard process. The production managers therefore concluded that the new process
did 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(D) Although some of the factory’s managers have been arguing that the product is outdated and ought to be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.
198.
The manager concluded that the new process produced a cost savings on the basis of a trial run of the process
in which costs were 15 percent lower than they had been previously. You are asked to identify something that
casts doubt on their conclusion.
Choice C is the best answer. If production costs at the factory fell for a similar product that was produced without
using the new process, it is more doubtful that the observed production cost reductions achieved during the trial
run were actually produced by the new process.
Choice A is incorrect; the fact that the managers had hoped for cost reductions of fifty percent does not cast any
doubt on their conclusion that the new process had produced at least some savings. Choice B is incorrect since
finding the source of the cost savings in the trial shows that the savings were no mere accident and so reinforces
the managers’ conclusion. Choice D and E are incorrect since by emphasizing that certain aspects of the
product-its design and raw materials-were the same in the standard process and the new process, these two
answer choices support, rather than cast doubt on, the conclusion that the process itself produced the savings.
