The following appeared in a memo to executives at a company that manufactures industrial equipment:
"We are spending too much on free customer service after a sale has been made; we need to limit our warranty to two years in order to improve our profit margins. The current lifetime warranty can lead to costs decades into a product's life cycle. Also, we pay our customer service employees a premium because they must possess expert skills across the entirety of our very diverse product line, including products we no longer sell."
Discuss how well reasoned you find this argument. Point out flaws in the argument's logic and analyze the argument's underlying assumptions. In addition, evaluate how supporting evidence is used and what evidence might counter the argument's conclusion. You may also discuss what additional evidence could be used to strengthen the argument or what changes would make the argument more logically sound.
My RESPONSE:
Based on the premise that the manufacturer has been spending a lot on free customer service, the argument concludes that the manufacturer needs to limit its warranty to two years in order to improve its profit margins. The argument points out that the current lifetime warranty given by the manufacturer could lead to costs decades into a product's life cycle for the manufacturer and that customer service employees have to be paid a premium as they have to possess expert skills across the entirety of the manufacturer's diverse product line, including products they don't sell, to support his conclusion. The argument is not cogent because of the following reasons.
Firstly, the argument assumes cutting down on the warranty to two years will not have any adverse effect on the manufacturer's sale. This assumption totally uncalled for. If lifetime warranty is one of the unique selling points for the manufacturer, cutting down on the warranty years could actually lead to fall in sales and profits of the manufacturer.
Secondly, the argument assumes that during the warranty period, the customer is provided with free customer service during the entire warranty period. No such statement has been made to prove the correctness of the assumption. It could be that free customer service is only provided during the first two years of the warranty, whereas for the rest of the years paid customer service is the norm. In such a case, limiting the warranty period to two years is not going to have any effect on the profits of the manufacturer.
Finally, the author points out that because of a diverse product line of the manufacturer, which may include the products the manufacturer may not be selling any more, as the cause that requires a premium to be paid to customer service employees. But even if the warranty was to be cut to two years, no evidence have been provided that would prove that this premium might not have to paid to customer service employees. It could very well be that premium is still have to be paid to the customer service employees because otherwise these customer service employees could just shift to jobs to another competitor who is willing to pay them that premium.
Hence, the argument is not logically convincing. The argument could be strengthened if the argument specifically mentions that cutting lifetime warranty to two years warranty would result in manufacturer losing customers. It would help if the argument makes it clear that free customer service is provided during the entire warranty period, and not only for two years. Hence if warranty period was shortened, the manufacturer will save the cost incurred for customer service. Finally, it should be made crystal clear that the only reason for paying premium to customer service employees is the diverse product line they support and not any other reason for ex. competitive market forces that are trying to poach on these employees.