Question

Previously, Autoco designed all of its cars itself and then contracted with specialized parts suppliers to build parts according to its specifications. Now it plans to include its suppliers in designing the parts they are to build. Since many parts suppliers have more designers with specialized experience than Autoco has, Autoco expects this shift to reduce the overall time and cost of the design of its next new car.
Which of the following, if true, most strongly supports Autoco’s expectation?
(A) When suppliers provide their own designs, Autoco often needs to modify its overall design.
(B) In order to provide designs for Autoco, several of the parts suppliers will have to add to their existing staffs of designers.
(C) Parts and services provided by outside suppliers account for more than 50 percent of Autoco’s total costs.
(D) When suppliers built parts according to specifications provided by Autoco, the suppliers competed to win contracts.
(E) Most of the Autoco’s suppliers have on hand a wide range of previously prepared parts designs that can readily be modified for a new car.

Answer 1

Answer:

(E) Most of the Autoco’s suppliers have on hand a wide range of previously prepared parts designs that can readily be modified for a new car.

Explanation:

(A) When suppliers provide their own designs, Autoco often needs to modify its overall design.

This modification is more likely to increase time and cost than to decrease them.

(B)in order to provide designs for Autoco, several of the parts suppliers will have to add to their existing staffs of designers.

This will increase the cost of the next car, rather than decreasing it.

(C) Parts and services provided by outside suppliers account for more than 50 percent of Autoco’s total costs.

Suggests that outside suppliers are an important component of costs, but does not help clarify whether the plan will reduce costs.

D) When suppliers built parts according to specifications provided by Autoco, the suppliers competed to win contracts.

It’s also possible that suppliers will no longer compete for contracts, which could actually increase costs . Since the answer choice doesn’t specify which of these is correct, it isn’t clear how it affects the conclusion, which deals only with what will change after the new plan is instated.

(E) Most of the Autoco’s suppliers have on hand a wide range of previously prepared parts designs that can readily be modified for a new car.

. This answer choice suggests that suppliers will not be starting from scratch when designing new parts; they may be able to save time and/or cost by modifying existing designs.