GMAT Focus EditionData InsightsEasy
A project manager is analyzing the resource allocation for three ongoing projects: Project X, Project Y, and Project Z. The following graph displays the percentage of the total budget allocated to each project and the percentage of the total workforce assigned to each project. [Imagine a bar chart here with two bars per project: one for 'Budget Allocation (%)' and one for 'Workforce Allocation (%)'.] Project X: Budget = 40%, Workforce = 30% Project Y: Budget = 30%, Workforce = 40% Project Z: Budget = 30%, Workforce = 30% Based on the information provided, which project is most workforce-intensive relative to its budget?
- AProjects X and Z are equally workforce-intensive.
- BProject X
- CProject Z
- DProject Y
Show answer & explanationAnswer & explanation
Correct answer: D. Project Y
To determine which project is most workforce-intensive relative to its budget, calculate the ratio of Workforce Allocation to Budget Allocation for each project. Project X: 30/40 = 0.75. Project Y: 40/30 ≈ 1.33. Project Z: 30/30 = 1. Project Y has the highest ratio, indicating it is the most workforce-intensive.
Why the other options are wrong
- A. Project X (0.75) and Project Z (1) are not equally workforce-intensive, and neither is the most intensive.
- B. Project X has a ratio of 0.75, which is lower than Project Y.
- C. Project Z has a ratio of 1, which is lower than Project Y.
Ratio Analysis
The process of comparing line items in financial statements, or other data sets, to derive insights into performance, efficiency, or risk by expressing one value in relation to another.
- Ratios simplify complex data into comparable metrics.
- They highlight relationships between different variables.
- Context is crucial for interpreting ratio results.
Memory trick: Workforce per dollar, a project's true collar.