Question

Relations between the factory and the dealer are distant and usually strained as the factory tries to force cars on the dealers to smooth out production. Relations between the dealer and the customer are equally strained because dealers continuously adjust prices œ make deals œ to adjust demand with supply while maximizing profits. This becomes a system marked by a lack of long-term commitment on either side, which maximizes feelings of mistrust. In order to maximize their bargaining positions, everyone holds back information œ the dealer about the product and the consumer about his true desires.

• A. As a result, “deal making‘ becomes rampant, without concern for customer satisfaction.
• B. As a result, inefficiencies creep into the supply chain.
• C. As a result, everyone treats the other as an adversary, rather than as an ally.
• D. As a result, fundamental innovations are becoming scarce in the automobile industry.
• E. As a result, everyone loses in the long run.

Answer 1

The correct option is E As a result, everyone loses in the long run.

The passage explains the kind of differences that exist between the components in the supply chain, (ie. production to distribution to consumer). The nature of the differences results in a system lacking commitment on the part of the components, and lacking transparency. The para is best closed with the option that points to the logical result of such a situation – that is provided in choice E 'everyone loses in the long run'. Choice A is inappropriate since, in 'deal-making', the customer would have his own satisfaction in mind. Choice B brings in circumstances that would follow in continuation. Choice C brings in a thought contrary to the tone of the paragraph Choice D is not relevant to the content of the paragraph. Hence choice (E) is the answer.