12bhang wrote:
Shelby Industries manufactures and sells the same gauges as Jones Industries. Employee wages account for forty percent of the cost of manufacturing gauges at both Shelby Industries and Jones Industries. Shelby Industries is seeking a competitive advantage over Jones Industries. Therefore, to promote this end, Shelby Industries should lower employee wages.
Which of the following, if true, would most weaken the argument above?
(A) Because they make a small number of precision instruments, gauge manufacturers cannot receive volume discounts on raw materials.
(B) Lowering wages would reduce the quality of employee work, and this reduced quality would lead to lowered sales.
(C) Jones Industries has taken away twenty percent of Shelby Industries' business over the last year.
(D) Shelby Industries pays its employees, on average, ten percent more than does Jones Industries.
(E) Many people who work for manufacturing plants live in areas in which the manufacturing plant they work for is the only industry.
The answer to this particular question is fairly simple. However, I wanted your help regarding some answer choices and the the roles that they could play.
A) Because they make a small number of precision instruments, gauge manufacturers cannot receive volume discounts on raw materials.
Choice A is telling us about the lack of an alternate way to reduce its costs in order to increase competitive advantage over Jones.Does this actually strengthen the argument? By pointing out the lack of another means to improve its advantage , does it strengthen our belief that reducing employee salaries will have the intended effect.
If you remember the mall owners question that i asked you - They "must " do something to achieve something. There the presence of an alternate method was serving as a weakener. In this case, will the lack of one of the hundred possible methods to achieve competitive advantage serve as a strenghtener? The verbiage of the conclusion is also not as strong as in the other question. it is only saying that the company should do something. Not that it has to or that it must.
Choice D: Shelby industries pays on an average its employees 10% more than does Jones Industries .
Does this also serve as a strenghtener ? I think not. Because , if Shelby pays its employees 10% higher than does Jones, it does not give us any reason to believe that the plan will be successful.
Hi 12bhang
I think I could help you a bit.
For every CR questions, understand the conclusion correctly is KEY.
The conclusion here is:
Shelby Industries will have a competitive advantage over Jones Industries (by reducing employee salaries). Key word is "competitive advantage". So
competitive advantage will lead to what? Clearly, increase sale volume. NOT lower sales prices.If Shelby reduces employee salaries, its sale price will be lower for sure. But that does not make sense, if sale volume does not increase.
Now let examine A and D.
(A) Because they make a small number of precision instruments, gauge manufacturers cannot receive volume discounts on raw materials.
As you know, total manufacturing cost = raw material cost + other costs + labor costs. If raw material cost stays the same, labor cost will be reduced ==> sale price reduces. Yes, It's true. Does it strengthen the conclusion - "have a competitive advantage"?
If you think competitive advantage = lower sale price ==> A is a strengthener. BUT that's not what Shelby wants (or the intended meaning of the conclusion). All Shelby wants is to increase its sale volume. Hence, A is not strengthener because it does not give you any idea that Shelby can improve its sales.
D) Shelby Industries pays its employees, on average, ten percent more than does Jones Industries.
Does it strengthen a conclusion? No. I would say D is not a strengthener, cause it helps nothing to buttress the conclusion (Shelby will have a "competitive advantage").
Let see an example: Shelby uses almost machine to manufacture gauges, so it uses fewer employees. But its employees are those who have high skills to manage automated machine. ==> Shelby must pay higher salaries, but labor is still 40%. If Shelby reduces its employees salaries, its employees will quit job ==> Shelby does not have "competitive advantage".
In short, In order to say an option is weakener / strengthener, you should
understand the conclusion (also the intended meaning) correctly. Do fall in trap just because apply theories too mechanically.
Hope it helps.