Answer:
- (D) Transportation costs from the logging site to the factory that are determined by volume of cargo would be lower if the conversion into chips is done at the logging site rather than at the factory.
Step-by-step explanation:
I will list the specific premises for reference later.
#1. United Lumber will use trees from its forests for two products.
#2. The tree trunks will be used for lumber and the branches converted into wood chips to make fiberboard.
#3. The cost of this conversion would be the same whether done at the logging site, where the trees are debranched, or at United's factory.
#4. Wood chips occupy less than half the volume of the branches from which they are made.
How do them support the the conclusions (A) through (E)?
(A) Converting the branches into wood chips at the logging site would require transporting a fully assembled wood-chipping machine to and from the site.
This coud be true, but it is not specifically stated.
Even, assuming it is right, because it is reasonable, since the transportation of the machine would be required once to and once from the site, it could involve a lower cost than transporting huge amounts of branches instead of lower volume wood chips numerous times.
Thus, this proposition is not supported.
(B) It would be more economical to debranch the trees at the factory where the fiberboard is manufactured.
This is not reasonable because, ttransporting the trees without debranching them first is impractical from the point of view of handling and transport. The tree must be debranched at the logging site where, as especified in the premise #3.
(C) The debranching of trees and the conversion of the branches into chips are the only stages in the processing of branches that it would be in United's economic advantage to perform at the logging site.
You cannot conclude this, because no information is given about other processes.
(D) Transportation costs from the logging site to the factory that are determined by volume of cargo would be lower if the conversion into chips is done at the logging site rather than at the factory.
It is specifially stated in the premise# 4.= that, "Wood chips occupy less than half the volume of the branches from which they are made".
This is the reasonable option, because it is a fact that the transportation costs of transportation are detemined by volume of cargo.
Thus, under the assumption that this is a continuous long term operation, this is most strongly supported by the premises.
(E) In the wood-processing industry, branches are used only for the production of wood chips for fiberboard.
This is never said. Thus, not supported.