ESSAY QUESTION:
The following memo was circulated by the management team of a retail company:
"We are very pleased to announce that the relocation of our inventory, which had been located in four different warehouses throughout the country, to a single new warehouse near Company headquarters in Boston. This consolidated location will cut the company's expenses for warehouse rent in half. As a result we expect our monthly profitability to go up by this amount."
Discuss how well reasoned you find this argument. Point out flaws in the argument's logic and analyze the argument's underlying assumptions. In addition, evaluate how supporting evidence is used and what evidence might counter the argument's conclusion. You may also discuss what additional evidence could be used to strengthen the argument or what changes would make the argument more logically sound.
My Essay:
The argument above states that relocation of the company inventory from four different warehouses throughout the country to single new warehouse in Boston will increase the monthly profitability of the company because the company will save on the warehouse rent. This argument has various flaws as it relies on various questionable assumptions and ignores potential factors that could affect the Company's profit. Hence the argument fails to be logically persuasive.
The main problem with the argument is it mistakenly assumes that the only way to increase company's monthly profit is to decrease it's expenses for warehouse rent. The argument totally ignores other factors that can have impact on company's monthly profit. For example, profit of a company depends on many factors like product quality, market condition in terms of supply and demand, cost of raw material and cost of production. Author can provide sufficient evidence to support this assumption.
Secondly, the argument assumes that the four warehouses in different location were actually a disadvantage to the company and were increasing the company's expenses for warehouse rent . What if the four different warehouses were actually an advantage to the company? The four different warehouses in different location can actually decrease the transportation cost , time and resource effort needed to ship the products from the inventory to the market . The relocation of the inventory to single warehouse can lead to added expense of the transportation cost for the company. This assumption can be strengthened by substantiating the claim that the holding the inventory in four different location was an added expense to the company without any benefit whatsoever and centralizing the inventory will decrease the added expense without any other loss to the company.
Thirdly, the argument does not provide any details on cost of transporting all the inventory from different locations to Boston . The cost of this transportation could be so huge that it would prevent any profitability in the company's expenses.The argument should have provided evidence that the company will not incur any additional cost of distribution of inventory due to the relocation of the inventory.
Finally, the argument assumes that the single warehouse will be able to accommodate entire inventory from all four different warehouse. If the size of the single warehouse is not able to accommodate all the inventory ,then some of the inventory might be harmed leading to loss for the company . The argument can be strengthened by providing data that the single inventory size in Boston can accommodate all the inventories in the four location combined.
In summary, since the argument fails to address the key factors that will result either in direct or indirect cost to the company, the claim that the relocation of the inventory will result in profitability is just a wishful thinking. The author may consider addressing the above key factors to substantiate his claim.
The following memo was circulated by the management team of a retail company:
"We are very pleased to announce that the relocation of our inventory, which had been located in four different warehouses throughout the country, to a single new warehouse near Company headquarters in Boston. This consolidated location will cut the company's expenses for warehouse rent in half. As a result we expect our monthly profitability to go up by this amount."
Discuss how well reasoned you find this argument. Point out flaws in the argument's logic and analyze the argument's underlying assumptions. In addition, evaluate how supporting evidence is used and what evidence might counter the argument's conclusion. You may also discuss what additional evidence could be used to strengthen the argument or what changes would make the argument more logically sound.
My Essay:
The argument above states that relocation of the company inventory from four different warehouses throughout the country to single new warehouse in Boston will increase the monthly profitability of the company because the company will save on the warehouse rent. This argument has various flaws as it relies on various questionable assumptions and ignores potential factors that could affect the Company's profit. Hence the argument fails to be logically persuasive.
The main problem with the argument is it mistakenly assumes that the only way to increase company's monthly profit is to decrease it's expenses for warehouse rent. The argument totally ignores other factors that can have impact on company's monthly profit. For example, profit of a company depends on many factors like product quality, market condition in terms of supply and demand, cost of raw material and cost of production. Author can provide sufficient evidence to support this assumption.
Secondly, the argument assumes that the four warehouses in different location were actually a disadvantage to the company and were increasing the company's expenses for warehouse rent . What if the four different warehouses were actually an advantage to the company? The four different warehouses in different location can actually decrease the transportation cost , time and resource effort needed to ship the products from the inventory to the market . The relocation of the inventory to single warehouse can lead to added expense of the transportation cost for the company. This assumption can be strengthened by substantiating the claim that the holding the inventory in four different location was an added expense to the company without any benefit whatsoever and centralizing the inventory will decrease the added expense without any other loss to the company.
Thirdly, the argument does not provide any details on cost of transporting all the inventory from different locations to Boston . The cost of this transportation could be so huge that it would prevent any profitability in the company's expenses.The argument should have provided evidence that the company will not incur any additional cost of distribution of inventory due to the relocation of the inventory.
Finally, the argument assumes that the single warehouse will be able to accommodate entire inventory from all four different warehouse. If the size of the single warehouse is not able to accommodate all the inventory ,then some of the inventory might be harmed leading to loss for the company . The argument can be strengthened by providing data that the single inventory size in Boston can accommodate all the inventories in the four location combined.
In summary, since the argument fails to address the key factors that will result either in direct or indirect cost to the company, the claim that the relocation of the inventory will result in profitability is just a wishful thinking. The author may consider addressing the above key factors to substantiate his claim.
