Apogee Company:
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06 Apr 2022, 15:24
The argument posed in the memorandum of the Apogee Company lacks logic and is flawed for many reasons. First, the comparison of how the company used to run versus how it runs today lacks details that would be imperative to consider, such as the two periods being observed and the location of the original sole operations unit. Secondly, the passage makes and assumption that more supervision would lead to higher levels of productivity. Making this assumption with no other data to support that claim would not be prudent. Lastly and importantly, the passage fails to take into account other factors that can lead to different levels of profitability or costs such as cost of labor, current supply and demand dynamics of the product being produced, and trends in the overall market for that item.
Comparing two situations and drawing conclusions based on facts, requires an immense amount of detail. Comparing operations during a pervious time to “today” is vague and does not take into account different industry trends, technological changes and labor changes that can contribute to differences in company operations over time. It would be imperative to observe these differences from the two time periods in question to make a fair assessment of this claim. Another example of the lack of details provided is that we were not provided the location of the original sole operations location. Based on the argument being made, it would be important to take into account rent levels in that area, labor costs, transportation costs and access to highways and warehouses, for example. This argument would be made stronger if we knew over what time period and what locations we were comparing, along with supporting data.
An assumption made in the passage is that increased supervision will lead to increased efficiency. Although the author makes this assumption, the author does not provide any supporting information or studies on if this was proven to be true. This argument could be made stronger if we saw data over long time periods that companies who invest in more supervisors per employee, produce better outcomes. This finding could be compelling.
Profitability and cost cutting are important factors to consider when running a business, however they can be tricky to maximize and minimize, respectively due to the many factors that play a role. The passage makes the assumption that by having a sole operating location, they company would be able to cut costs and therefore raise profits. In order to make this assumption, we would need to look at detailed financials comparing rents, cost of supplies, transportation and shipping costs, cost and availability of labor, to name a few. None of these very important considerations are factored in to make that assumption and therefore we cannot come to a just conclusion based on what is provided.
When comparing two operating models, it is imperative to take into consideration every factor that could be contributing to profits and costs. Unfortunately, this passage does not provide sufficient evidence to make the claim that by having one sole operating location, the company would improve profitability.