An Advanced Look at the Next Generation GMAT
By Marian Dent, Dean
Pericles American Business & Legal Education Project, Moscow
February 2012

What is the GMAT "Next Generation?"
Starting on June 5, 2012, the GMAT will make the biggest upgrade in a decade by adding a new section called Integrated Reasoning. At the time of this printing, the "Next Generation GMAT," as the marketing people have dubbed it, has not yet been released. We, like every other GMAT preparation center on the planet, are guesstimating from the press releases, sample tests and professional gossip about what the section will actually be like, and what effects it will have on test takers.

If you are already familiar with the GMAT, you probably know that the basic exam format consists of two 30 minute essays, analysis of an argument and analysis of an issue; followed by a short, optional break; followed by a 75 minutes Quantitative Section; then another, short, optional break; followed by a 75 minute Verbal Section. Currently, you receive a separate essay score of 1-6, a separate Quantitative and Verbal score of from 1-60 each, and then the all important GMAT total verbal and quant score of somewhere between 200 and 800. This last score is what most B-schools are concerned about. This number will follow you throughout your MBA application process.

The Next Generation GMAT will substitute a new Integrated Reasoning Section for the analysis of an issue essay. So starting June 5 you will receive one 30 minute analysis of an argument essay, one 30 minute Integrated Reasoning Section, a short break, and then the usual Quantitative and Verbal sections with a break between each. In terms of scoring, the Integrated Reasoning section will not affect that total number to which the B-schools pay so much attention. Your 200-800 score will still be based on just the quantitative and verbal sections of the exam. Like the essay, the Integrated Reasoning section will be a separate score, which B-schools may or may not care about.

The idea of the new section is to take the individual vegetables from the various parts of the old GMAT, and make them into a salad. In other words, they want to test your ability to solve complex problems using multiple sources such as graphs, texts and charts, and a variety of skills, the way people do in actual management situations. It's the math skills tested in the problem solving section, combined with the logical skills tested in the critical reasoning section, and with reading comprehension sprinkled on top for seasoning. The GMAC (Graduate Management Admissions Council) people who write the GMAT believe (and their marketing people are working hard to convince us) that the new section is closer to the kind of actual work you will be facing in your MBA.

In reality, not all B-schools are convinced that the new GMAT section is needed, or at least they are not all sure how they are going to be using the score. The GMAC is proud to tell us that they surveyed 740 business school managers to determine how the GMAT could be improved, but that's not many people when you consider that over 5000 B-school programs use the GMAT to access candidates.

Indeed, GMAC has correctly analyzed that B-schools are now focusing more on analytical skills. In these web-based days where data is widely available and carefully analyzed for almost any major business decision, companies are telling B-schools that they want to see graduating students with strong analytical skills. B-schools are adding courses in business analytics, and are often advising entering students that statistics courses are good preparation for their MBA.

But agreeing upon the need for analytically minded graduates does not necessarily mean that MBA programs should be looking only for analytically minded candidates. There is little agreement on whether these skills should be sought in entering B-school applicants, or taught to applicants during their MBA education. Moreover, there is even less agreement on whether a half hour, 12-question, timed test can accurately measure an applicant's potential analytical prowess.

Admissions personnel from some top business schools were consulted on the changes and we can expect that these schools might give more credence to Intergrated Reasoning scores early on. These schools included such popular locations for Russian students as Dartmouth, Tuck, Stockholm School of Economics, INSEAD, Duke Fuqua School of Business, London Business School, Northwestern Kellogg, and Stanford.

It's no surprise though, that many MBA Admissions directors outside the core schools that consulted on the test are still not sure how they intend to use the GMAT Integrated Reasoning scores. Although GMAC ran non-scored Integrated Reasoning sections for GMAT takers in July and August of last year, and again this January, there just isn't enough statistical data to tell us how the new section scores will relate to candidates' real ability to succeed in MBA courses. Indeed, GMAC is not even expecting to release the scoring guidelines to B-schools until this April. All the schools know at the moment is that they will get a (probably 3 digit) adjusted score and a percentile score, and that they will have to adjust their admissions office computer systems to account for these.

Keep in mind also that the 200-800 total score is part of what the MBA rating services are currently looking at when they decide whether a B-school makes that all important ranking jump. If a 650 or above GMAT means that a school looks better in the rankings, common sense tells us then, that for at least the next year or so, B-schools will continue to mainly look for the high GMAT total score, rather than the Integrated Reasoning score, in evaluating applications. In any case, scores obtained on the GMAT are good for five years, and this will not change whether or not you took the exam before or after the Next-Gen changes.

So in short, don't panic. The new Integrated Reasoning section is a change for sure. But the change doesn't mean a complete revolution in study strategies. While you should be prepared for the new question types, for the moment you should still worry more about the all important 200-800 total score. Consider studying for the Integrated Reasoning section just a little detour on your road to a high overall score.

Inside the Integrated Reasoning Section
The GMAC is rather late in getting out study materials for the Integrated Reasoning Section. Indeed, the 13th edition of the Official Guide to the GMAT, and the new GMAT Powerprep Software will not be released until April.

Similarly, private test preparation publishers, such as the well renowned Manhattan Prep guides, are being held back from publication until the official materials are released.

This leaves very little time for studying the section. GMAC gives the rather unhelpful suggestion to study only the 12 questions on their website and prepare for the other parts of the exam until their more extensive study materials come out. We hope, however, that the rest of this article will help you at least know what to expect on the exam now.

According to the advance information released by GMAC the integrated reasoning section will take 30 minutes and will include 12 questions, some of which may contain more than one part. GMAC is, of course, free to change its mind, but according to their current information the section will consist of four types of questions: graph interpretation, table analysis, two part analysis, and multi-source reasoning. This section of the exam is not a CAT. In other words, it's not computer adaptive and the questions will remain the same no matter how well or how badly you do on the previous questions.

Another thing to note-a simple, on-screen calculator is provided in this section.

The remaining material here will preview each question type. Answers to the sample questions can be found at the end of the article.

Graphics Interpretation
Graphics interpretation contains the type of graphs and charts that you often find in scholarly papers and reports, together with, often complex, explanations of what the graphic data represents. The graphics are followed by fill in the blank questions, where one of several answer choices drops down to fill the blank. Here is an example:

The graph shown above indicates the number of applying and accepted students in ABC Business School. Interpreting the data shows that

1) Approximately (select one: 35%, 50%, 65%) of the 350 students applying to ABC had a GMAT score of between 600 and 650, while approximately (20%, 30%, 65%) of students with similar scores were admitted to the school. (The answers can be found at the end of this article.)

Although this is just a sample, if this were the real GMAT, you might have two or three different questions accompanying this graph. But all in all, this type of graph interpretation is not too different from the types of problems test takers have always been doing in GMAT problem solving.

Graph interpretation becomes more difficult when the language is complicated, such as when you are given scientific or social science types of charts to interpret, and reading comprehension type passages explain what the data means. The following example is from GMAC's website, www.mba.com, and we can't imagine anything more complex for a non-native speaker.

"The diagram shows, in three column groupings, various divisions of Earth's geological history since its formation approximately 4,600 million years ago. In the leftmost column grouping, the Precambrian eon is subdivided into chronometric eons shown on the far left; but otherwise, in the rest of the graphic, each subsequent column to the right shows the subdivisions of the timeframes to its left. Each of the rightmost two column groupings is a magnification-with additional information-of a portion of the grouping directly to its left."

"Fill each blank using the drop-down menu to create the most accurate statement on the basis of the information provided."

2. "The Miocene epoch spans closest to (Select one 3% 25% 85%) of the era of which it is a part."

3. "According to the diagram the beginning of the (Select one Cambrian period, Triassic period, Pliocene epoch, Precambrian eon) marks the onset of a new eon, era, and period in geological history."

(Answers are at the end of this Article.)

Table Analysis
Table analysis questions ask you to interpret data contained in something like an Excel spreadsheet. You can even sort the data the way you can in Excel, although you can't run calculations or create Excel formulae.

Although many of us who work in business or the professions may feel more comfortable with reading spreadsheets than with interpreting scientific charts, the questions here can be tricky. Some questions have complex tables with a lot of different data to interpret. Contrarily some questions seem to have simple tables; but the questions with the simpler tables do not merely ask you to find the data in the spreadsheet, but can have complex explanations and can ask you questions that are much more like the questions in the data sufficiency or critical reasoning sections of the GMAT. For example, you may be asked whether the data in the spreadsheet is sufficient to let you calculate certain conclusions relating to the underlying subject of the data. Or you might be asked to logically evaluate whether the data given in the table would be helpful in explaining some totally different information.

In sum, keep in mind that, although the table might look simple, the written description and the questions based on the table can be quite complex.

Here is an example:

Answer the next three questions based on the following: Given the recent turmoil during the Arab Spring and our company's investments in State X, we would like you to analyze the following data and extrapolate conclusions related to potential political developments in State X.

The table below displays the ages and political preferences of citizens of state X between the months of March and August, based on a survey by an international NGO. The second column indicates the percentage that this age group as a whole occupies in group of the entire voting age citizens of the country. The third column indicates, in hundreds, out of a total of 300,000 people who responded to the poll, the number in each age group who responded. The fourth and fifth columns, respectively, show the numbers (in hundreds) and percentages of respondents who pronounced themselves as opposed to the current regime. Subsequent columns indicate the numbers and percentages of those people opposed to the regime inclined to particular actions in opposition.

4) Which of the following is the most serious flaw in the survey shown above?
a) The numbers of people surveyed is not sufficient to extrapolate to the population of the country.
b) The numbers of people surveyed in each age group does not correspond with the percentage of the population in each age group.
c) The survey does not say what sums of money those who intend to financially support the opposition are likely to donate.
d) The survey should have included data on both opponents and supporters of the Regime.

5) Assuming that the figures in the survey accurately predict the actual actions of the population, if the country has a voting population of 120 million people, how many people aged 18-21 can be expected to financially support rival political parties?
a) approximately 14,400,000 people
b) approximately 13,000,000 people
c) approximately 1,600,000 people
d) approximately 320,000 people
e) approximately 7,800 people

6) Which of the following can be determined by the data contained in the table?
a) The total percentage of citizens who intend to vote against the Parliament
o Can be determined
o Cannot be determined
b) The percentage of citizens age 50 or above who intend to vote for the President?
o Can be determined
o Cannot be determined
c) The number of persons ages 18-25 who are likely to attend a particular political demonstration.
o Can be determined
o Cannot be determined

Again, the answers to these questions are at the end of the article.

Two Part Analysis
Two part analysis questions give you a word problem to solve followed by two columns with choices, from which you have to select one choice in each column. Basically these are mathematics or logic problems, and are not difficult, provided you just think carefully. Some are so simple that, if you had plenty of time, you could simply plug in all the number choices to see which combinations works. The trick to these problems will be completing them quickly in order to stay on schedule to finish the rest of the section.

Here are some examples:

Our online shopping service currently generates annual sales revenue of $5,000,000. Our physical shop currently generates $49,000,000. However, the sales revenue generated by online shoppers is increasing at a fairly constant annual rate, whereas annual sales revenues from our physical stores are decreasing at a fairly constant annual rate. If these trends continue, in 8 years we will be generating the same amount of revenues from on-line sales as from physical shops, and after that we will be generating more on line than in shops.

7) In the table below, identify the rates of increase or decrease that must be true in order for the prediction above to hold. Click on only one button in each column.

Physical shops	On-line shopping	Increase or decrease in dollars per year.
o	o	2,000,000
o	o	2,500,000
o	o	3,000,000
o	o	3,500,000
o	o	4,000,000
o	o	4,500,000

8) Five workers Anne, Betty, Caroline, Douglas and Eric are scheduled to work on five days of a single week, Monday through Friday. There are three shifts each day, a morning shift, an afternoon shift, and an evening shift. No more than one worker works on any one shift. Each of these workers works exactly two shifts during the week. No one of these workers can work more than one shift on a single day. Every day exactly two people work. Anne and Caroline work on the same days each week. Eric does not work on any afternoon or evening shifts. Caroline does not work on any morning or afternoon shifts. Anna works two consecutive days of the week. Betty's second shift of the week occurs on an earlier day than Anna's first shift of the week.

Which of the following must be true, and which of the following must be false. Click on only one button in each column.

	Must be true	Must be false
Douglas works on Tuesday afternoons.	o	o
Betty works on Monday.	o	o
Anna works on Tuesday mornings.	o	o
Eric does not work on a Thursday morning.	o	o
Caroline works on Fridays.	o	o
Anna does not work on Fridays.	o	o

Again, the answers are at the end of the article.

Multisource Reasoning
The final question type in the Integrated Reasoning Section is Multisource Reasoning. These are a bit like the reading comprehension questions in the Verbal Section of the GMAT, but you are reading more than one source of information. These are perhaps the least concrete of the questions in this section, and have the closest relationship to working realities.

Multisource reasoning questions contain multiple pages, given as tabs that you click back and forth from on the computer. These pages could include text, tables or graphics. A popular variant is to give a hypothetical chain of email correspondence, with information related to, but not concretely answering, a business decision that must be made. The idea is for you to parse together the important info, filter out the irrelevant data, and infer the correct decisions to make from the conversation or data provided. Sometimes the information can be found directly in the passages, and other times it takes rather grey area interpretation, that seems to try to weed out those people who simply don't have communications skills or common sense.

Here is an example with multiple questions following it:

Email From: Accounting Firm CEO
To: Business Development Director
January 15 9:37
Although I liked your idea of putting on the taxation seminar on Jan 22, I just spoke with my assistant and found out that only 8 potential clients have registered so far. In order to cover the cost of renting the hotel conference room and justify the staff costs in holding this event we should have at least 25 attendees. Also we will have to order course books and materials today and we expect a cost of approximately $100 per attendee in materials, which is 40% of the event cost and which is non-refundable. I'm concerned that we may not have enough potential clients in attendance to make it a worthwhile business development exercise. If we cancel it now it will seem more professional than if we were to cancel the event at the last minute, plus it would save in printing costs. What are your thoughts?

Email From: Business Development Director
To: Accounting Firm CEO
January 15 10:13
I understand that you want at least 25 attendees to make this worthwhile, but usually more than 60% of potential clients attending such seminars register in the last week before the event. Plus, I haven't yet invited any of our existing clients, and I plan to do so. Historically 20% of those existing clients whom we invite show up to such events, and 50% of those bring us additional business within the coming year. Of course, we could also save money by providing electronic rather than printed materials to the attendees. I think if we go ahead and plan on 30 people like we discussed, and provide a nice bag, with logo pen and paper, and the course materials on CD or flash drive we could still make a good impression and save around $70 per person in printing costs. We could even invite more people and still stay on budget.

Email From: Accounting Firm CEO
To: Business Development Director
January 15 10:23
OK, you make the decision on whether to proceed, but please keep in mind that the budget is fixed and I don't want to see it exceeded if we can avoid it. Also keep in mind that the capacity of the room we rented is 50 people and we will have to go to a double size and double price room if we go any larger. But try to get as many attendees as you can so that we can make this a worthwhile event.

Assume for the purposes of the following questions that the number of people who register for the seminar will equal the number who attend.

9) From the information provided above you can determine that the budget for the seminar is fixed at which amount?
o $5000
o $6250
o $7500
o $9000

10) How many POTENTIAL clients does the Business Development Director expect will attend the seminar?
o 8
o 14
o 20
o 25
o 30

11) If the Business Development Director makes the savings that he plans by avoiding printing costs, how many existing clients can the Business Development Director invite to the seminar and still reasonably hope to fill the room as much as possible but stay on budget.
o 30
o 70
o 150
o 200
o 350

12) Presumably the CEO's and the Business Development Director's ultimate purpose in holding the seminar is to generate business for the firm. What additional piece of data would you most like to know in order to know whether the Business Development Director's idea of inviting existing clients will ultimately be better or worse for the firm than if he extended invitations to more potential clients?
o What percentage of potential clients invited to such seminars actually register?
o What percentage of potential clients who attend such seminars end up becoming clients of the firm?
o What amount the firm spends on other business development activities for existing clients versus what it spends for new clients?
o Whether existing clients are likely to attend other firm events during the year?

Answers to the Sample Questions
1) The answer is 35% and 30%. From looking at the chart you can see that 350 students applied to ABC, while 200 were admitted. The horizontal axis logically seems to indicate the GMAT scores, where the vertical axis appears to indicate the number of students at each score level. Extrapolating the midway point of the GMAT score axis at about the midway point between 600 and 700, we find the 650 point and see that approximately 50 students applied, about 45 at about the 630 point, and about 30 at the 600 point, making a total of 125 students. Estimating the percentage by dividing 125 by 350 and we know that the answer for the first blank has to be around 35%.

Next, just a glance at the chart shows us that the accepted line is smaller than the applied line at the 650-600 score level. It looks like 30+20+10 or 60 students out of the 200 acceptees. That's 30%

2) To answer these two questions you first have to figure out the GMAT explanation of the diagram. Basically they are saying that the first chart spans a huge time period, while the second one shows more detail about a small part of the first chart's time period, and the final chart shows even more detail about a small part of the second chart's time period. Then you have to notice the distinctions made between Eon, Era, Period and Epoch, which are noted at the top of each chart. After that, it's just a matter of carefully looking at the data and guessing.

In Question 2, the Miocene "Epoch" is show in the far right chart, and it looks big compared to the Pliocene, but you have to notice that it is all part of the Tertiary Era, and this Era is what the question is asking about. Against the Tertiary Era it is pretty small. Just eyeballing it, the obvious answer is 25% rather than a very tiny 3% or a huge 85%.

3) For Question 3 you need to look at the largest amount of time among eras, eons and periods, because we are looking for a time that breaks up all of them. An Eon is the longest time period, and we see that there are only two, Phanerzoic and Precambrian. The word "Pre-Cambrian" actually gives you a hint at the answer; but just to make sure look at the middle chart and see that indeed the Cambrian era marks the start of the Phanerzoic Eon. None of the others choices can claim to change an Eon, so you are safe going with Cambrian and moving on to the next question.

4) The correct answer is B. The survey has, for example 65,000 respondents in the 18-21 age group, which represents approximately 22% of the survey, while the 18-25 group only represents 11 % of the population. Contrarily, the survey only has 23,600 respondents in the 50+ group, much fewer than the 20% of the population that this group represents. Similar, though smaller, discrepancies exist with other age groups, making it difficult to extrapolate accurate predictions from the numbers mentioned in the survey without further calculation. Choice A is the wrong answer because we have no information about the population of State X as a whole, thus we cannot tell whether A is a flaw or not. In any case, there appears to be a large number of people surveyed so we can even suppose that it would not be a flaw. Choices C and D would be useful information, but just because they are beyond the scope of the survey does not mean that the survey is flawed.

5) The correct answer is C, approximately 1,600,000 people. It states in the table that 11% of voters are age 18-21. Multiplying a population of 120,000,000 million people by .11, you get 13,200,000 citizens in that age group. Of those, only 12% intend to financially support rivals, so you must multiply 13,200,000 by .12, which gives you 1,580,400, which is closest to answer choice C. Do not be fooled by using the numbers of people in that age group who responded with that answer in the survey. As mentioned above, the numbers do not represent the percentages of voters, and thus are misleading.

6) Question 6a can be determined by simply adding up the numbers in column 9 and finding the average. Question 6b cannot be determined because the voters consist of three groups-those who plan to vote for the incumbents, those who intend to vote for anyone else, and those who do not plan to vote at all. The table does not tell us what percentage of people do not intend to vote at all. Question 6c cannot be determined by the table because we cannot logically determine from a likelihood to attend demonstrations generally, that people would be likely to attend a particular one. It's possible, for example, that a particular demonstration is held in favor of parties that are not popular with young people, or are held at times that are inconvenient for young people to attend.

7) The answer is that physical shops must be decreasing their sales revenue by $3,500,000 a year, and on line shopping must be increasing by $2,000,000 a year. In eight years, both will be earning $21,000,000 a year in sales revenues.

You know that you are looking for both numbers to have equal revenues in the exact period of 8 years. This is an easy, fixed rate problem. You can do this algebraically. 5,000,000 +8x = 49,000,000 + 8y 8x = 44000000+8y x=5,500,000 +y x-y = 5,500,000 The only options within the answer choices that get you this are 2,000,000 and - 3,500,000

Alternately, if you are the type who likes to avoid algebra at all costs, you can just multiply each of the possible rates of increase or decrease by 8. You will have a calculator provided on this part of the GMAT. Plus, to make it faster you can just lop off the zeros from your thinking as you multiply, so the calculation is quick and easy. So 2 million dollars x 8 years becomes 16. 2,500,000 becomes 20. 3 million becomes 24. 3,500,000 becomes 28. 4 million becomes 32. And 4,500,000 becomes 36. Now you just add each of these figures to $5,000,000, (ie to 5) and subtract each from $49,000,000 (ie from 49) to see which numbers give you an equal amount after 8 years.

8) It must be false that Anna works on Tuesday mornings and it must be true that Eric does not work on a Thursday morning.

A hint to solving this type of problem is to start with the item on which there are the most restrictions. Here, Anna is mentioned in many of the restrictions, so we start with Anna and we find a restriction that is contradicted by one of the choices right away. It must be false that Anna works on Tuesday mornings because Betty's second shift must occur on an earlier day than Anna's first shift of the week. Thus Anna cannot work any earlier than Wednesdays.

Indeed, since Caroline and Anna must work on the same days, and Caroline does not work mornings or afternoons, in other words Caroline takes only the evening shift, then Anna can only work on Wednesday, Thursday or Friday mornings or afternoons. Since Anna is also restricted to working two consecutive weekdays, she either has to work Wednesday-Thursday, or Thursday-Friday. Hence, she must work Thursdays and Caroline must work Thursdays. Since only two workers work on each day and two workers must already work on Thursday, then it is not possible for Eric to work on Thursday mornings.

9) The answer is $7500. The CEO stated that $100 per attendee would amount to 40% of the event cost, and although the figure of 25 people was a minimum, the Business Development Director mentioned that the plan they had discussed was for 30 attendees. Thus 30 x $100 = $3000 and is 40% of the total budget. Therefore the budget is 3000/.4 or $7500.

10) The answer is 20. The correspondence is taking place on January 15 and the seminar is planned for January 22, which is a week away. If 8 potential clients have registered already and the Business Development Director expects 60% of those who attend to register in the last week, then he must expect that current registrants are 40% of those who will eventually register. His expected attendance is 8/.4 or 20.

11) Again, printing costs of $3000 are part of the budget and the Business Development Director plans to reduce them to the cost of $900, or $30 per person. Thus he has saved $2100 from his budget and could potentially have 70 (2100/$30) more attendees, but this will cause him to exceed the room size. This means that the practical limitation is now the size of the room and not the cost of materials. If he expects 20 potential clients and can have 50 attendees as a maximum, then he can try to get 30 more attendees. Since only 20% of existing clients who are invited to such events usually attend, he can invite 150 existing clients to try to get the 30 more people he wants.

12) The answer is what percentage of potential clients who attend such seminars end up becoming clients of the firm. If he expects that 50% of existing clients who attend will bring the firm new business, he would be better off inviting more existing clients than potential clients if he expects a less conversion of attendance to business for potential client attendees. While it would be useful to know whether existing clients are likely to attend other firm events, thus indicating that there are other ways to get in that existing client business, the percentage of potential clients who are likely to become clients is more directly relevant to the question.