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.
RESPONSE:
The argument, that the monthly profitability will increase by the amount saved in warehouse rent, made by the management in its memo is seriously flawed. The argument is based on a set of assumptions which need further clarification.
First, the argument assumes that all the savings in rent will translate into profitability, and the expenses would remain the same. It is necessary to determine the exact relationship between profitability and savings from rent to make a strong argument. For example, if the cost of shipping the products out of the new warehouse is more than the earlier and this increase is enough to offset the savings from rent then the argument falls apart because there would be no savings in this case. Second, the argument assumes that the profitability is only due to the savings in rent and not from other sources. It seems logical to assert that the consolidation would result in trimming the workforce, thus the cost savings from distributing fewer wages could be the reason for the increase in profitability. The argument fails to list other sources of savings which could increase the monthly profitability.
In conclusion, by basing the monthly profitability solely on the savings from rent the company management wakens its argument. If however, the memo provides further information on how the shipping costs will change due to the relocation the argument will be strengthened. Furthermore, the argument will be strengthened if it details how the management will offset the increase in shipping cost, or as a matter of fact any other expenses. Also the argument will be strengthened if provides a comparison of how many people will be employed in the new warehouse as compared to the four older ones, furthermore the details on amount of wages which will be disbursed will help strengthen the argument. This information will help determine if there would be any savings due to reduction of wages.
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.
RESPONSE:
The argument, that the monthly profitability will increase by the amount saved in warehouse rent, made by the management in its memo is seriously flawed. The argument is based on a set of assumptions which need further clarification.
First, the argument assumes that all the savings in rent will translate into profitability, and the expenses would remain the same. It is necessary to determine the exact relationship between profitability and savings from rent to make a strong argument. For example, if the cost of shipping the products out of the new warehouse is more than the earlier and this increase is enough to offset the savings from rent then the argument falls apart because there would be no savings in this case. Second, the argument assumes that the profitability is only due to the savings in rent and not from other sources. It seems logical to assert that the consolidation would result in trimming the workforce, thus the cost savings from distributing fewer wages could be the reason for the increase in profitability. The argument fails to list other sources of savings which could increase the monthly profitability.
In conclusion, by basing the monthly profitability solely on the savings from rent the company management wakens its argument. If however, the memo provides further information on how the shipping costs will change due to the relocation the argument will be strengthened. Furthermore, the argument will be strengthened if it details how the management will offset the increase in shipping cost, or as a matter of fact any other expenses. Also the argument will be strengthened if provides a comparison of how many people will be employed in the new warehouse as compared to the four older ones, furthermore the details on amount of wages which will be disbursed will help strengthen the argument. This information will help determine if there would be any savings due to reduction of wages.
