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Difficulty: Very hardExplaining Surprising Outcomes

Read the scenario and evaluate the statement that follows.

Scenario: In 2025, Omnicorp upgraded its flagship manufacturing plant with a state-of-the-art automated workflow. This upgrade immediately increased the average number of units produced per hour by each assembly worker by 50%. Omnicorp did not lay off any assembly workers, and the total number of hours each worker spent actively assembling units per year remained exactly the same as the previous year. Furthermore, the market price of the units remained constant, and consumer demand was high enough that every unit produced was sold. Management confidently projected a massive increase in annual revenue. However, at the end of the fiscal year, the plant’s total revenue generated from the sale of these units had actually decreased by 15% compared to the previous year.

Statement: The apparent discrepancy is logically resolved if it is true that the new automated machinery is so complex that the factory must completely halt all assembly operations for three full days every week to run diagnostic calibrations, thereby reducing the plant's active production schedule from seven days a week to only four days a week.

Answer: Answer

Answer

The statement is FALSE because it fails to resolve the apparent discrepancy.
The statement is FALSE. The stimulus provides a closed system of variables: total revenue is a product of workforce size, annual hours worked, hourly efficiency, and unit price. The stimulus explicitly holds workforce size, annual hours, and price constant, while increasing efficiency by 50%. This mathematically guarantees a 50% increase in revenue. The candidate statement suggests the factory lost three days of operation per week. However, because the stimulus already established that the total annual hours worked per employee did not change, the reduction in operating days merely means the identical number of labor hours were completed in fewer days. The total output remains unaffected, meaning the statement completely fails to explain the 15% revenue decrease.

Step-by-Step Solution

1
Identify the two contradictory facts in the stimulus that create the paradox.
Fact 1: Worker efficiency increased by 50%, with absolutely no change to workforce size, annual hours worked per employee, or unit price. Fact 2: Total annual revenue decreased by 15%.
Understanding the exact parameters of the discrepancy is required before evaluating any potential resolution.
2
Determine the mathematical relationship established by the premises.
Because workers, annual hours, and price remained constant while hourly output increased by 50%, the total revenue is mathematically locked into a 50% increase.
This establishes the logical hurdle that any correct resolution must overcome.
3
Evaluate the candidate statement to see if it explains how the revenue could drop despite the constraints.
The statement indicates the factory operates fewer days per week. However, since the stimulus explicitly states annual labor hours remained the same, the reduction in operating days does not affect total production volume.
A valid resolution must account for all premises. A statement that contradicts or ignores a locked premise is not a valid resolution.
4
Conclude whether the statement resolves the paradox.
The statement fails to explain the 15% revenue drop and leaves the paradox entirely unresolved.
Since the mathematical constraints still force a 50% increase, the statement provides no explanatory mechanism for the decrease.

Key Concept

Parameter Tracking and Scope Constraints
Estimated Time:2m 0s
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Topics

Explaining Surprising Outcomes

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