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The following appeared in a memorandum from the business department of the Apogee Company:
“When the Apogee Company had all its operations in one location, it was more profitable than it is today. Therefore,
the Apogee Company should close down its field offices and conduct all its operations from a single location. Such
centralization would improve profitability by cutting costs and helping the company maintain better supervision of all
employees.”
Discuss how well reasoned . . . etc.


In the above argument the author claims that since the Apogee Company is not as profitable as it was when it had no field offices, the field offices should be closed. The premise of the argument is that by closing the field offices the company will start making more profit. At the first glance the argument appears to be very appealing but through close examination it reveals that the argument is problematic because of two fallacies made.
Firstly, the author makes a gracious assumption that the reason for not making more profits lies solely with the opening up of field offices. The author claims that by closing the field offices the Apogee Company will start making high profits and does not suggest to find the exact reason behind making less profit. For example, if the company is not making high profits because of the presence of another company producing similar product and selling it for less, mere closing of the field offices will not solve the problem. This is why, it is very important to find the exact cause and act accordingly.
Secondly, it is obvious that the Apogee company opened up its field offices since the high profits increased the demand of the product and hence the production. Thus, if the field offices are closed the company will have to conduct all its operations from a centralized location. This will in turn increase the shipment costs for far off places and hence affect the overall profit. For example, a car manufacturing company which is only located at Kentucky will manufacture its cars there and transport to a customer in Chicago which will only increase the transportation costs. But if there was another field office at Chicago, the transportation costs could have been reduced.
In conclusion, the author’s argument is not persuasive as it stands. In order to strengthen the argument, the author must check for the actual reason causing affecting the profits and act accordingly.