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      Question

      A passage is given below, followed by five options.

      Choose the option that represents the assumption underlying the information given in the passage. Passage: A retail chain has announced that it will replace its manual inventory tracking system with an AI-driven automated system to eliminate errors and reduce overhead costs. The management has stated that this transition will lead to a 15% increase in annual profits by ensuring that popular items are always in stock and reducing the waste of perishable goods. The plan of the management is based on which of the following assumptions?
      A The current staff is incapable of learning how to use new digital software. Correct Answer Incorrect Answer
      B AI-driven systems are more expensive to maintain than traditional manual systems. Correct Answer Incorrect Answer
      C The cost of implementing and maintaining the AI system will be less than the projected 15% profit increase. Correct Answer Incorrect Answer
      D Customers prefer interacting with automated systems rather than human staff members. Correct Answer Incorrect Answer
      E Perishable goods make up the majority of the retail chain’s total inventory. Correct Answer Incorrect Answer

      Solution

      Analysis of the Passage: The management claims that the new system will "reduce overhead costs" and lead to a "15% increase in annual profits." Identifying the Assumption: For any new technology to result in a net profit increase, the board must assume that the savings and gains it provides will not be completely canceled out by the cost of the technology itself. If the system cost more than it saved, the profit goal would be impossible. Therefore, C is the foundational assumption. A is incorrect: The passage focuses on the system's efficiency, not the staff’s inability to learn. B is incorrect: This would weaken the argument rather than acting as a supporting assumption. D is incorrect: The passage discusses inventory management (back-end), not customer interaction (front-end). E is incorrect: While the system helps with perishable goods, it isn't necessary to assume they are the majority of the inventory for the plan to work; they only need to be a part of the profit-leaking problem.

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