Hi Experts,
Please share your opinion/evaluation of the below mentioned AWA response.
Thanks in advance.
Question:The following appeared in a memorandum from a member of a financial management and consulting firm:
“We have learned from an employee of Windfall, Ltd., that its accounting department, by checking about 10 percent of the last month’s purchasing invoices for errors and inconsistencies, saved the company some $10,000 in overpayments. In order to help our clients increase their net gains, we should advise each of them to institute a policy of checking all purchasing invoices for errors. Such a recommendation could also help us get the Windfall account by demonstrating to Windfall the rigorousness of our methods.”
Discuss how well reasoned you find this argument. In your discussion be sure to analyze the line of reasoning and the use of evidence in the argument. For example, you may need to consider what questionable assumptions underlie the thinking and what alternative explanations or counter examples might weaken the conclusion. You can also discuss what sort of evidence would strengthen or refute the argument, what changes in the argument would make it more logically sound, and what, if anything, would help you better evaluate its conclusion.
Answer:The argument claims that the company should recommend all its clients to setup a policy for checking all its purchase invoices. This policy would leas to increase their net gains. This claim is based on the information that the accounting department of Windfall, Ltd. saved $10,000 last month by checking 10% of the puchase invoices. Stated in this way, the argument does not consider all contributing factors, on the basis of which the conclusion can be made. Hence, the argument is weak and has several flaws.
Firstly, the argument is setup on the basis of the information of only about 10% of the purchasing invoices of the accounting department of Windfall, Ltd. This signals the possibility that the recommendation is based on insufficient evidence. It may be possible that only the invoices that were checked contained the overpayment errors, and that the other invoices may be in order. The argument would have been much clearer if the argument stated that the other invoices were also identified with these errors. Hence, the firm's recommendation is not made on solid grounds.
Secondly, the author does not consider the extensive time and effort that will have to spent by their clients in checking all the invoices. These would lead to additional expenses by the companies for hiring additional staff specifically for this activity, thereby leading to a reduction in net gains. If the invoices are in proper order and the increase in expenses is greater than the amount saved in overpayments, the company will suffer a net loss. This is opposite to the intent of the recommendation. Had the author mentioned that the invoice checking process would be automated or the costs associated would be negligible, the argument would be much clearer to support.
Thirdly, the author suggests that the recommendation would help the company get the Windfall account by demonstrating the rigorousness of their methods. This is again a weak and unsupported claim. The argument clearly mentions that it was Windfall, Ltd. and its accounting department who initiated this practice of checking invoices. Hence, there is no firm reason to believe that the leadership of Windfall, Ltd. will be impressed by some other company performing the same practice. This claim would be further strengthened if the author mentions some other supporting information of how the company would support Windfall in other verticals of their business. Without these conclusive details, this claim is more of wishful thinking rather than a deduction made from conclusive evidence.
Finally, the author fails to answer some important questions: Do all the clients of the company use purchase invoices? Do the clients of the company have a particular history of overpayments made in the past? Without convincing answers to these questions, the argument fails to consider all necessary factors that should be analyzed in order to arrive at the conclusion.
In conclusion, the argument is flawed for the above mentioned reasons and is therefore unconvincing. The argument would be strengthened if the author had provided details around the practices and policies of the existing clients, and the financial cost implications of the invoice checking exercise. It is not possible to evaluate an argument without necessary details and supporting evidences, in this particular case the services and products that woulf make the company a valuable partner for Windfall. In the absence of such details and evidences, the argument is open to discussion and therefore inconclusive.