I'm having GMAT test tomorrow. This is my first essay response to analysis of argument. I am very nervous about tomorrow 
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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."
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The argument claims that when Apogee Company had all its operations in one location, it was more profitable than it is today. Hence, the company should close down its field offices and run its operation from a single location, thus improving its profitability via cost cutting and maintaining better supervision of all employees. Stated in this way the argument fails to mention several key factors, on the basis of which it could be evaluated. The conclusion relies on assumptions, for which there is no clear evidence. Therefore, the argument is rather weak, unconvincing, and has several flaws.
First, the argument quickly assumes that because the company has field offices in different locations, they are generating more costs than revenues. This statement is a stretch and not substantiated in any way. There are numerous examples in other companies, where business running from various locations brings in generous sum of revenues. Field offices are usually situated in customers’ neighborhood, and company sales force based in these offices can have quick access to sell and service their customers. Imagine if they have to travel from the head office to see their customers everyday, the traveling expense will surely increase, especially in the time like this that gasoline price has risen to an unprecedented level from what it has been a few years ago. The author fails to take this incremental cost into account, and the argument would have been much clearer if it explicitly stated that the company has considered all other costs incurring from running operation in one location.
Second, the argument claims that the company earns less profit due to decentralized operations than it was running from a single location in the past. In fact, it is not at all clear that type of operations is the only contributing factor to company’s lower profit. When comparing level of profitability over time, higher product cost, production cost or even promotion and advertising cost can all contribute to lower profits.
Finally, the argument concludes that closing down other operation sites is deemed to be a way for cost cutting and as a result improve the profit, and how can better supervision of employees be linked to improve profitability. From this statement, without convincing answers to these questions, one is left with the impression that the claim is more of a wishful thinking rather than substantive evidence.
In summary, the argument is flawed and therefore unconvincing. It could be considerably strengthened if the author clearly mentioned all the relevant facts. In order to assess the merits of a certain situation, it is essential to have full knowledge of all contributing factors.
Thank you for your rating
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."
____________________________________________
The argument claims that when Apogee Company had all its operations in one location, it was more profitable than it is today. Hence, the company should close down its field offices and run its operation from a single location, thus improving its profitability via cost cutting and maintaining better supervision of all employees. Stated in this way the argument fails to mention several key factors, on the basis of which it could be evaluated. The conclusion relies on assumptions, for which there is no clear evidence. Therefore, the argument is rather weak, unconvincing, and has several flaws.
First, the argument quickly assumes that because the company has field offices in different locations, they are generating more costs than revenues. This statement is a stretch and not substantiated in any way. There are numerous examples in other companies, where business running from various locations brings in generous sum of revenues. Field offices are usually situated in customers’ neighborhood, and company sales force based in these offices can have quick access to sell and service their customers. Imagine if they have to travel from the head office to see their customers everyday, the traveling expense will surely increase, especially in the time like this that gasoline price has risen to an unprecedented level from what it has been a few years ago. The author fails to take this incremental cost into account, and the argument would have been much clearer if it explicitly stated that the company has considered all other costs incurring from running operation in one location.
Second, the argument claims that the company earns less profit due to decentralized operations than it was running from a single location in the past. In fact, it is not at all clear that type of operations is the only contributing factor to company’s lower profit. When comparing level of profitability over time, higher product cost, production cost or even promotion and advertising cost can all contribute to lower profits.
Finally, the argument concludes that closing down other operation sites is deemed to be a way for cost cutting and as a result improve the profit, and how can better supervision of employees be linked to improve profitability. From this statement, without convincing answers to these questions, one is left with the impression that the claim is more of a wishful thinking rather than substantive evidence.
In summary, the argument is flawed and therefore unconvincing. It could be considerably strengthened if the author clearly mentioned all the relevant facts. In order to assess the merits of a certain situation, it is essential to have full knowledge of all contributing factors.
