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A corporation's directors have identified the following shortcomings in the corporation's computer-related systems:The office computers and Internet c...

GMAT Multi Source Reasoning : (MSR) Questions

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Multi Source Reasoning
Case Study
MEDIUM
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Deficiencies
Priorities
Table

A corporation's directors have identified the following shortcomings in the corporation's computer-related systems:

  • The office computers and Internet connections are slow and inefficient, hindering employee productivity.
  • The security system is too old to effectively safeguard the computers against potential theft of corporate data.
  • The corporate website is unattractive and difficult for customers to use.

To address such concerns, the directors are considering recommendations about five possible upgrades to the corporation's computer-related systems.

Ques. 1/3

For each of the following officials of the corporation, select Yes if the information provided suggests that the official would probably regard upgrading the Internet connections as a higher priority than upgrading the payroll system. Otherwise, select No.

A
Yes
No

The CFO

B
Yes
No

The CEO

C
Yes
No

The CTO

Solution

OWNING THE DATASET

Understanding Source A: Text - Directors' Assessment of System Deficiencies

Information from Dataset Analysis
"The office computers and Internet connections are slow and inefficient, hindering employee productivity"
  • Current technology is outdated and causing work delays
  • Both hardware (computers) and network (internet) need upgrading
  • Inference: Direct negative impact on how much work employees can complete
"The security system is too old to effectively safeguard the computers against potential theft of corporate data"
  • Security technology hasn't been updated
  • Main risk is data theft, not physical equipment theft
  • Inference: Company's confidential information is vulnerable
"The corporate website is unattractive and difficult for customers to use"
  • Website has both visual and functional problems
  • Customer experience is being harmed
  • Inference: May be losing sales due to poor website
"directors are considering recommendations about five possible upgrades"
  • Five specific upgrade options exist
  • Still in evaluation phase
  • Inference: Decision not yet made on which upgrades to pursue

Summary: Directors have identified three major technology problems affecting productivity, security, and customer experience, and are evaluating five possible upgrades to address these issues.


Understanding Source B: Text - Senior Leadership Priorities Discussion

Information from Dataset Analysis
"CFO urges that the directors give a higher priority to upgrades that are projected to cause a greater increase in annual profits"
  • CFO wants upgrades that boost profits the most
  • Focus is on financial performance improvement
  • Inference: Short-term profit maximization perspective
"CEO recommends that upgrades that are projected to result in a greater increase in the corporation's stock market value...be given a higher priority"
  • CEO prioritizes market perception and company valuation
  • Looking at stock price impact
  • Inference: Longer-term value creation focus
  • Linkage to Source A: All three identified problems could affect stock value differently
"CTO argues that, if the non implementation of any upgrade is projected to result in a greater decrease in annual profits...that upgrade should be given a higher priority"
  • CTO focuses on preventing losses rather than creating gains
  • Risk mitigation approach
  • Inference: Defensive strategy to protect current performance
  • Linkage to Source A: Security vulnerability represents exactly this type of risk
"All parties agree that, other things being equal, less expensive upgrades should be given higher priority"
  • Cost efficiency is universally important
  • Acts as tiebreaker when other factors are equal
  • Inference: Budget constraints exist
"The proposed upgrade to the security system or to the payroll system would require that the proposed upgrade to the office computers be completed first"
  • Technical dependencies exist between upgrades
  • Office computer upgrade must come before security or payroll
  • Inference: Implementation sequence is constrained
  • Linkage to Source A: Office computer problems must be fixed before addressing security vulnerability

Summary: Senior executives have different prioritization criteria (profit increase, stock value, loss prevention) but agree on cost efficiency, while technical dependencies mean office computers must be upgraded before security or payroll systems.


Understanding Source C: Table - Projected Impacts of Five Upgrades

Table Analysis:

Office computers:

  • Highest expense (tied with security)
  • High stock value increase, but low profit increase
  • Medium profit decrease if not implemented
  • Inference: Expensive but necessary foundation upgrade
  • Linkage to Source A: Addresses productivity problem identified by directors
  • Linkage to Source B: Required prerequisite for other upgrades

Payroll system:

  • Medium expense with medium stock value increase
  • Low profit increase and low risk if not done
  • Inference: Modest upgrade with limited impact
  • Linkage to Source A: Not mentioned in original problems - unclear why included
  • Linkage to Source B: Depends on office computer upgrade first

Security system:

  • High expense with minimal benefits (low stock increase, no profit increase)
  • Highest risk if not implemented (high profit decrease)
  • Inference: Pure risk mitigation investment
  • Linkage to Source A: Directly addresses data theft vulnerability
  • Linkage to Source B: Perfect example of CTO's loss-prevention priority

Website:

  • Lowest expense with balanced benefits
  • Medium increases in both stock value and profits
  • No risk if not implemented
  • Inference: Most cost-effective opportunity
  • Linkage to Source A: Fixes customer experience issues
  • Linkage to Source B: Appeals to both CEO (stock) and CFO (profit) priorities

Internet connections:

  • Medium expense with highest profit increase potential
  • Low stock value increase, no downside risk
  • Inference: Strong operational improvement opportunity
  • Linkage to Source A: Addresses other half of productivity problem
  • Linkage to Source B: Strongly aligns with CFO's profit focus

Summary: The projections reveal that upgrades serve different purposes - security mitigates risk, website and internet offer growth opportunities, while office computers provide necessary foundation despite high cost.


Overall Summary

  • The dataset reveals a complex technology upgrade decision where directors identified three critical problems (productivity, security, customer experience)
  • Directors must choose among five possible upgrades with different cost-benefit profiles
  • Executive disagreement reflects fundamental trade-offs: security upgrade prevents major losses but generates no gains
  • Website and internet upgrades offer profit growth with no downside risk
  • Technical dependencies complicate matters further, as the expensive office computer upgrade must precede either security or payroll implementations
  • The absence of a clearly optimal choice explains why leadership remains divided on priorities

Question Analysis

The question asks whether each executive (CFO, CEO, CTO) would rank upgrading Internet connections as more important than upgrading the payroll system, based on their stated priorities. Key constraints include:

  • Must compare specifically Internet connections vs. payroll system
  • Must apply each executive's unique priority criteria
  • Both upgrades have same expense level (medium)

The answer type needed is a comparative evaluation based on executive priorities.

Connecting to Our Analysis

The analysis links each executive's priority to the relevant projection metric. We can extract comparative values for Internet connections and payroll system related to those metrics. All necessary data is available in the provided analysis to answer this question completely.

Extracting Relevant Findings

The comparison of Internet connections versus payroll system using each executive's priority metric shows that both upgrades have medium expense, so cost is neutral in comparison. Each executive prefers the upgrade with the better score in their priority area.

CFO Evaluation

The CFO prioritizes the upgrade that increases annual profits the most.

  • Internet connections have high profit increase
  • Payroll system has low profit increase
  • Difference: Internet connections provide significantly higher profit increase than payroll system
  • Result: CFO would prioritize Internet connections over payroll

CEO Evaluation

The CEO prioritizes the upgrade that improves stock market value the most.

  • Internet connections have low stock market value increase
  • Payroll system has medium stock market value increase
  • Difference: Payroll system provides better stock market value increase than Internet connections
  • Result: CEO would not prioritize Internet connections over payroll

CTO Evaluation

The CTO prioritizes upgrades where not implementing causes greater decrease in profits.

  • Internet connections have no decrease in profits risk if not upgraded
  • Payroll system has low decrease in profits risk if not upgraded
  • Difference: Payroll system poses some risk of profit decrease, Internet connections pose none, making payroll more urgent for CTO
  • Result: CTO would not prioritize Internet connections over payroll

Individual Statement/Option Evaluations

Statement 1 Evaluation

Evaluating "Yes" - whether executives would prioritize Internet connections over payroll system.

  • Criterion: Majority executive preference for Internet connections
  • Evidence: Only CFO prefers Internet connections (1 out of 3 executives)
  • Analysis: CEO and CTO both prefer payroll system over Internet connections
  • Conclusion: "Yes" represents the minority position (33% of executives)

Statement 2 Evaluation

Evaluating "No" - whether executives would not prioritize Internet connections over payroll system.

  • Criterion: Majority executive preference against Internet connections
  • Evidence: CEO and CTO prefer payroll system (2 out of 3 executives)
  • Analysis: Only CFO prefers Internet connections over payroll system
  • Conclusion: "No" represents the majority position (67% of executives)

Systematic Checking

Verification confirms the following points:

  • Both upgrades have identical expense (medium), so cost does not bias the decision
  • Each executive's priority metric clearly distinguishes between the two upgrades
  • There are no technical dependencies affecting these two upgrades specifically
  • Analysis is consistent with stated executive priorities from the provided sources

The final executive preference breakdown is: CFO: Yes, CEO: No, CTO: No.

Final Answer

  • Statement 1: No (minority preference)
  • Statement 2: Yes (majority preference)
Answer Choices Explained
A
Yes
No

The CFO

B
Yes
No

The CEO

C
Yes
No

The CTO

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