In conclusion, the recommendation is not well supported. To convince me that the proposed
restriction would achieve the desired outcome, the author would have to assure me that no
changes serving to increase Balmer’s moped-pedestrian accident rate will occur in the
foreseeable future. The author must also provide dear evidence that last year’s decline in
moped accidents in Torseau was attributable primarily to its moped rental restrictions rather
than to one or more other factors. In order to better evaluate the recommendation, I would
need more information comparing the supply of and demand for moped rentals on the two
islands. I would also need to know the rate of mopedpedestrian accidents in Torseau both prior
to and after the restrictions were enforced in Torseau.
Argument 19
The following appeared in a memo from the new vice president of Sartorian, a company that
manufactures men’s clothing.
"Five years ago, at a time when we had difficulties in obtaining reliable supplies of high-quality
wool fabric, we discontinued production of our deluxe alpaca overcoats. Now that we have a
new fabric supplier, we should resume production. This coat should sell very well: since we
have not offered an alpaca overcoat for five years and since our major competitor no longer
makes an alpaca overcoat, there will be pent-up customer demand. Also, since the price of
most types of clothing has risen in each of the past five years, customers should be willing to
pay significantly higher prices for alpaca overcoats than they did five years ago, and our
company profits will increase."
In this memo the vice president of Sartorian, a clothing manufacturer, argues that by resuming
production of alpaca (wool) overcoats, after discontinuing production of these coats five years
159
ago due to an unreliable alpaca supply, Sartorian would increase its profits. To support this
argument the vice president points out that Sartorian now has a new fabric supplier, and
reasons that since Sartorian’s chief competitor has discontinued making these coats there
must be pent-up consumer demand for them which Sartorian would fill. The vice president also
reasons that, since overall dothing prices have risen in each of the last five years, consumers
will be willing to pay higher prices for Sartorian’s alpaca coats. I find the argument specious in
several respects.To begin with, the argument relies on the assumption that the new fabric supplier will be a
reliable supplier of alpaca. Yet the memo provides no substantiating evidence for this
assumption. Perhaps the supply problems Sartorian experienced years earlier were
attributable not to its supplier at the time but rather to factors beyond any supplier’s control and
which might render the alpaca supply unreliable today as well. Besides, without evidence to
the contrary it is entirely possible that Sartorian’s new supplier will turn out to be unreliable and
to be blameworthy for that unreliability.
Even if the new supplier turns out to be reliable, the memo assumes too hastily, on the basis
of a competitor’s discontinuing alpaca coat production, that consumer demand for alpaca coats
made by Sartorian is now pent-up. Perhaps that competitor stopped making alpaca coats due
to diminishing consumer demand for them. Or, perhaps other clothing manufacturers are now
beginning to fill the market void by producing similar coats. Either of these scenarios, if true,
would cast serious doubt on the vice president’s claim that there is now pent-up alpaca coat
demand from which Sartorian would profit.
Even if the vice president can substantiate the two foregoing assumptions, the argument
relies on the additional assumption that consumers will be willing to pay whatever price
Sartorian requires to turn a profit on its alpaca coat sales. Yet, perhaps Sartorian’s costs for
alpaca wool will be so high as to preclude any profit from alpaca coat sales. Also, the fact that
clothing prices have been steadily increasing for five years suggests that consumers might
have less disposable income for purchasing items such as alpaca coats, espedally if
consumers’ income has not kept pace with escalating prices. Thus without stronger evidence
that consumers would be both willing and able to pay high prices for Sartorian’s alpaca coats
the vice president cannot convince me that the proposed course of action would be a profitable
one.
Finally, even if Sartorian would turn a profit from the sale of its alpaca coats, the memo’s
claim that the company’s overall profits would increase thereby is unwarranted.Sartorian’s
overall profitability is a function of revenue and expenses relating to all of Sartorian’s products.
Since the memo provides no evidence that Sartorian will continue to be profitable in other
respects, I simply cannot take the vice president’s argument seriously.
In sum, the argument is unpersuasive as it stands. To bolster it the vice president must
provide assurances that the new supplier will be a reliable and affordable alpaca supplier, and
that consumers will be able and willing to pay whatever prices Sartorian requires in order to
mm a profit from selling its alpaca coats. To better assess the argument I would need to know
whether consumers are demanding alpaca coats anymore, and if so whether new competitors
entering the alpaca coat market would thwart Sartorian’s efforts to profit from any pent-up
demand for these coats. I would also need detailed financial projections for Sartorian, to
determine the likelihood that it will continue to be profitable overall, aside from its predicted
160
profitability from alpaca coat sales.
Argument 20
The following appeared in a memo from the president of a company that builds and sells new
homes in Steel City.
"Over the past five years, the population of Steel City has increased by more than 20 percent,
and family incomes in Steel City have risen much faster than the national average. Nationwide,
sales of houses priced above $150,000 have increased more than have sales of lower-priced
houses. Such data indicate that we should make changes in our business to increase
company profits. First, we should build fewer low-priced houses than we did last year and
focus instead on building houses designed to sell at above $150,000. Second, we should hire
additional workers so that we can build a larger total number of houses than we did last year."
In this memo the president of a new-home construction firm in Steel City concludes that the
firm can increase its profits by focusing on building expensive homes, priced above $150,000,
rather than lower-priced homes, and by hiring additional workers to increase the number of
homes the firm can build. To support this recommendation the president cites the fact that
Steel City’s population has increased by more than 20% over the last five years and that family
income in Steel City is rising much faster than the nationwide average. The president also
points out that nationwide sales of homes priced above $150,000 are rising faster than sales of
lower-priced homes. In several respects, this evidence provides little credible support for the
president’s recommendation.