GMAT - Graduate Management Admission Data Insights: Two-Part Analysis Questions and Answers

Question 1

The table below provides sales and marketing data for four product lines. A marketing manager claims that the 'Widgets' product line generates more revenue in the East region than the 'Gadgets' product line generates in the West region. Based on the data, is this claim accurate, and by how much does the higher revenue exceed the lower revenue?

| Region | Product | Units Sold | Price per Unit ($) |
| :--- | :--- | :--- | :--- |
| North | Widgets | 2,500 | 40 |
| South | Gadgets | 4,000 | 30 |
| East | Widgets | 3,000 | 40 |
| West | Gadgets | 3,500 | 30 |

Accepted Answer

Accurate; the difference is $15,000.

Answer

To evaluate the claim, calculate the total revenue for each specified product-region combination. Revenue for Widgets in the East region is 3,000 units × $40/unit = $120,000. Revenue for Gadgets in the West region is 3,500 units × $30/unit = $105,000. Since $120,000 is greater than $105,000, the manager's claim is accurate. The difference in revenue is $120,000 - $105,000 = $15,000.

Question 2

A city's public transportation authority has two primary goals for its subway lines: 1) achieve an on-time performance (OTP) rate above 92%, and 2) keep the subsidy per rider below $2.25. The subsidy per rider is calculated as (Operating Cost - Fare Revenue) / Ridership. Based on the data table, which subway line successfully met both goals?

| Line | On-Time Perf. | Ridership (millions) | Operating Cost ($M) | Fare Revenue ($M) |
| :--- | :--- | :--- | :--- | :--- |
| Red | 93.5% | 12 | 55 | 30 |
| Blue | 91.8% | 15 | 60 | 28 |
| Green | 90.4% | 10 | 45 | 24 |
| Orange | 94.1% | 8 | 40 | 22 |

Accepted Answer

Red Line

Answer

Evaluate each line against both criteria. The OTP must be > 92% and the Subsidy per Rider must be < $2.25.
- Red Line: OTP is 93.5% (Pass). Subsidy = ($55M - $30M) / 12M = $25M / 12M ≈ $2.08 (Pass). The Red Line meets both goals.
- Blue Line: OTP is 91.8% (Fail).
- Green Line: OTP is 90.4% (Fail).
- Orange Line: OTP is 94.1% (Pass). Subsidy = ($40M - $22M) / 8M = $18M / 8M = $2.25 (Fail, as it is not *below* $2.25).

Question 3

A consulting firm tracks the number of projects its departments handle. Which department has the highest ratio of 'Strategic' projects to the number of consultants in that department?

| Department | Total Consultants | 'Strategic' Projects | 'Operational' Projects |
| :--- | :--- | :--- | :--- |
| Finance | 40 | 12 | 25 |
| Technology | 60 | 15 | 40 |
| Healthcare | 25 | 10 | 15 |
| Logistics | 50 | 14 | 32 |

Accepted Answer

Healthcare

Answer

To answer the question, calculate the ratio of 'Strategic' projects to total consultants for each department:
- Finance: 12 / 40 = 0.30
- Technology: 15 / 60 = 0.25
- Healthcare: 10 / 25 = 0.40
- Logistics: 14 / 50 = 0.28
The highest ratio is 0.40, which belongs to the Healthcare department.

Question 4

A company's marketing strategy is considered most efficient when the ratio of Customer Lifetime Value (LTV) to Customer Acquisition Cost (CAC) is maximized. Based on the data in the bar chart, which marketing channel is the most efficient?

[A bar chart shows four channels. Social Media: CAC=$100, LTV=$450. Email Marketing: CAC=$40, LTV=$220. Search Ads: CAC=$150, LTV=$600. Content Marketing: CAC=$80, LTV=$380.]

Accepted Answer

Email Marketing

Answer

To determine the most efficient channel, calculate the LTV to CAC ratio (LTV / CAC) for each one:
- Social Media: $450 / $100 = 4.5
- Email Marketing: $220 / $40 = 5.5
- Search Ads: $600 / $150 = 4.0
- Content Marketing: $380 / $80 = 4.75
The highest ratio is 5.5, which corresponds to Email Marketing, making it the most efficient channel.

Question 5

A food production company, AgriCorp, saw its organic produce sales increase by 15% last year, while its conventional produce sales decreased by 5%. The CEO concludes that to maximize future profits, AgriCorp must divest all conventional operations and invest exclusively in expanding its organic production. The CEO's argument assumes that the higher production costs and lower yields of organic farming will be more than offset by higher prices and continued sales growth. The CEO's conclusion is most vulnerable to criticism on which of the following grounds?

Accepted Answer

The conclusion relies on sales revenue trends without considering the relative profitability of each produce type.

Answer

The primary flaw in the CEO's reasoning is equating sales growth with profit growth. Profit depends on both revenue (sales) and costs. The passage explicitly states that organic farming has 'higher production costs.' It is possible that the conventional produce line, despite declining sales, has a much higher profit margin and contributes more to overall profit than the growing organic line. The conclusion is vulnerable because it makes a major strategic decision based only on top-line revenue trends without considering the bottom-line profitability of each division.

GMAT Practice Test

GMAT Practice Test

GMAT - Graduate Management Admission Data Insights: Two-Part Analysis Questions and Answers