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."
This argument is weak for several reasons, mainly because it makes several assumptions and provides no evidence in concluding that it will be more profitable for Apogee Company to close all its field offices and operate from a single, centralized location.
Firstly, the argument assumes that operating from a single location will still be as profitable as it was in the past. What it does not consider is that the scene could have changed at the location. There may be more competition for Apogee Company than before in that location. The cost of production, operation and labour may have increased. If these changes have taken place, it may no longer be profitable for the company to set up its operations in only that location.
Secondly, the argument assumes that operating at different locations is not profitable in the long run. Setting up field offices and operations at different locations initially incurs expenses from the company which may cut into the profits. However, as the company expands its operations in the new locations, it may also gain new clients and projects. This kind of expansion is important for the company and will increase its profitability in the long term. Projections of profits, client base and future costs are some of the facts that may have helped in analysing whether the shutting down of operations at a particular location may have increased the profitability of the company in the long term. Had the argument referred to any of these, it could have been strengthened.
Thirdly, the argument fails to establish that operating from a single location is profitable for the company. It states that by operating from a single location the company can cut costs and supervise employees but assumes that the company does not have projects at different locations. If it does then it would still need to spend on travel expenses and third party vendors to supervise such projects. This may result in expenditure greater than what the company saves by operating from a single location. If the argument had stated that all the projects undertaken by the company were only in the current location then the company would definitely cut costs and effectively supervise employees and the argument would have been strengthened.
Because the argument makes several unwarranted assumptions and does not back up its claims with proper evidence and facts, it is unreliable and should not be the basis for making the decision suggested in the argument.
"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."
This argument is weak for several reasons, mainly because it makes several assumptions and provides no evidence in concluding that it will be more profitable for Apogee Company to close all its field offices and operate from a single, centralized location.
Firstly, the argument assumes that operating from a single location will still be as profitable as it was in the past. What it does not consider is that the scene could have changed at the location. There may be more competition for Apogee Company than before in that location. The cost of production, operation and labour may have increased. If these changes have taken place, it may no longer be profitable for the company to set up its operations in only that location.
Secondly, the argument assumes that operating at different locations is not profitable in the long run. Setting up field offices and operations at different locations initially incurs expenses from the company which may cut into the profits. However, as the company expands its operations in the new locations, it may also gain new clients and projects. This kind of expansion is important for the company and will increase its profitability in the long term. Projections of profits, client base and future costs are some of the facts that may have helped in analysing whether the shutting down of operations at a particular location may have increased the profitability of the company in the long term. Had the argument referred to any of these, it could have been strengthened.
Thirdly, the argument fails to establish that operating from a single location is profitable for the company. It states that by operating from a single location the company can cut costs and supervise employees but assumes that the company does not have projects at different locations. If it does then it would still need to spend on travel expenses and third party vendors to supervise such projects. This may result in expenditure greater than what the company saves by operating from a single location. If the argument had stated that all the projects undertaken by the company were only in the current location then the company would definitely cut costs and effectively supervise employees and the argument would have been strengthened.
Because the argument makes several unwarranted assumptions and does not back up its claims with proper evidence and facts, it is unreliable and should not be the basis for making the decision suggested in the argument.
