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21 Jun 2020, 03:29
Kudos
Bookmarks
Hey,
I would be really grateful if anyone could give suggestions or remarks on my analysis of the following argument:
The following appeared as part of the business plan of an investment and financial consulting firm:
“Studies suggest that an average coffee drinker’s consumption of coffee increases with age, from age 10 through age 60. Even after age 60, coffee consumption remains high. The average cola drinker’s consumption of cola, however, declines with increasing age. Both of these trends have remained stable for the past 40 years. Given that the number of older adults will significantly increase as the population ages over the next 20 years, it follows that the demand for coffee will increase and the demand for cola will decrease during this period. We should, therefore, consider transferring our investments from Cola Loca to Early Bird Coffee.”
My analysis:
The investment and consulting firm's plan to consider transferring their investments from Cola Loca to Early Bird Coffee is seriously flawed because it makes several assumptions regarding the consumption behavior of the coffee and cola customers based on an observed trend.
Primarily, the business plan makes an argument on the assumption that the current population sample will be exactly representative of the population 20 years later. It neglects the possibility that if over the next two decades, the total number of births increases significantly causing an increase in the overall total population, there shall be fewer adults than teenagers. Thus, the expected rise in coffee consumption shall not take place in such a scenario.
Secondly, the studies which are used as evidence to support the business plan only entail trends over the past 40 years. In any case, no mention of future trends has been taken into account to make a valid judgment. If coffee consumption decreases, cola consumption increases, or both cases occur together over the next 20 years, it could seriously undermine the business plan. Thus any evidence surrounding future trends comparable to the past 40 years could lend further support to the conclusion.
Thirdly, the reasoning behind the argument is illogical in the sense that it does not give any idea of actual numbers of coffee and cola consumption, or of the prices which are important factors or indicators for any investment. Also, the rates of decline or increase in consumption is also a critical number that is missing. In the situation that the decline in cola consumption with increasing age is almost insignificant, or the rise in coffee consumption is insignificant, making an investment change may not make much sense. The argument also fails to consider that if despite the decline in cola consumption, the quantity of total cola consumed even at the age of 60 surpasses total coffee consumed, then investment to coffee consumption might not be profitable.
Since the business plan is based on the conclusion which overlooks many such assumptions stated above, it is far from a sound argument.
I would be really grateful if anyone could give suggestions or remarks on my analysis of the following argument:
The following appeared as part of the business plan of an investment and financial consulting firm:
“Studies suggest that an average coffee drinker’s consumption of coffee increases with age, from age 10 through age 60. Even after age 60, coffee consumption remains high. The average cola drinker’s consumption of cola, however, declines with increasing age. Both of these trends have remained stable for the past 40 years. Given that the number of older adults will significantly increase as the population ages over the next 20 years, it follows that the demand for coffee will increase and the demand for cola will decrease during this period. We should, therefore, consider transferring our investments from Cola Loca to Early Bird Coffee.”
My analysis:
The investment and consulting firm's plan to consider transferring their investments from Cola Loca to Early Bird Coffee is seriously flawed because it makes several assumptions regarding the consumption behavior of the coffee and cola customers based on an observed trend.
Primarily, the business plan makes an argument on the assumption that the current population sample will be exactly representative of the population 20 years later. It neglects the possibility that if over the next two decades, the total number of births increases significantly causing an increase in the overall total population, there shall be fewer adults than teenagers. Thus, the expected rise in coffee consumption shall not take place in such a scenario.
Secondly, the studies which are used as evidence to support the business plan only entail trends over the past 40 years. In any case, no mention of future trends has been taken into account to make a valid judgment. If coffee consumption decreases, cola consumption increases, or both cases occur together over the next 20 years, it could seriously undermine the business plan. Thus any evidence surrounding future trends comparable to the past 40 years could lend further support to the conclusion.
Thirdly, the reasoning behind the argument is illogical in the sense that it does not give any idea of actual numbers of coffee and cola consumption, or of the prices which are important factors or indicators for any investment. Also, the rates of decline or increase in consumption is also a critical number that is missing. In the situation that the decline in cola consumption with increasing age is almost insignificant, or the rise in coffee consumption is insignificant, making an investment change may not make much sense. The argument also fails to consider that if despite the decline in cola consumption, the quantity of total cola consumed even at the age of 60 surpasses total coffee consumed, then investment to coffee consumption might not be profitable.
Since the business plan is based on the conclusion which overlooks many such assumptions stated above, it is far from a sound argument.
25 Jun 2020, 07:21
Kudos
Bookmarks
https://gmatclub.com/forum/please-rate- ... 26618.html
The following is the response I gave to one of the essays. Much of it holds good for many of our GMAT Argument essays. One may judiciously use the contents to enrich one’s essays I GMAT
daagh
_____
The following is the response I gave to one of the essays. Much of it holds good for many of our GMAT Argument essays. One may judiciously use the contents to enrich one’s essays I GMAT
daagh
_____
Moderator:
