The following appeared in a letter from a firm providing investment advice for a client.
"Most homes in the northeastern United States, where winters are typically cold, have traditionally used oil as their major fuel for heating. Last heating season that region experienced 90 days with below-normal temperatures, and climate forecasters predict that this weather pattern will continue for several more years. Furthermore, many new homes are being built in the region in response to recent population growth. Because of these trends, we predict an increased demand for heating oil and recommend investment in Consolidated Industries, one of whose major business operations is the retail sale of home heating oil."
Write a response in which you examine the stated and/or unstated assumptions of the argument. Be sure to explain how the argument depends on these assumptions and what the implications arefor the argument if the assumptions prove unwarranted.
The author of this letter predicts that there would be an increased demand for heating oil in the northeastern United States through pointing out (1) most homes in the northeastern United have used oil as their major fuel for heating in the past, (2) an continuous cold in the future according to climate forecasters, and (3) more and more homes are being built in this area. Furthermore, the author also recommend investment in Consolidated Industries since its major business operations is the retail sale of home heating oil. However, I am not convinced for several reasons.
To begin with, there is an unsubstantiated assumption that people would continue using oil for heating in the future. However, it is possible that other more efficient or convinient ways would supersede heating oil, such as natural gas, solar energy, radiant floor heating and the list will go on. In addition, the same case I talked about above would also occur in relation to another assumption that new homes would still use heating oil. Consequently, if the author cannot rule out these possibilities,the prediction that an increased demand for heating oil would not be persuasive.
Secondly, the information about the region experienced 90 days with below normal temperatures is not accurate enough to evaluate. Since the author only inform us the circumstance about last heating season, but we do not know what information it is in the past several years, and thus we cannot know what 90 days means. Perhaps there were more than 90 days in the past two years, if this case exists, demand for heating oil might be still remain constant or even decreased.
Thirdly, even though people in this area would still continue using oil for heating, about the recommendation, however, the author cannot ensure that investors would have benefits. Because there is no information suggest that Consolidated Industries are the major or even only companies for saling heating oil in this area, and people would buy oil mainly from this company. Perhaps other companies has more potentials, and higher net than Consolidated Industries would do. Without these information, we could not hastily assume that investing Consolidated Industries will necessarily earn a substantial profit.
In sum, both of the prediction and recommendation the author says in the letter are unconvincing. To bolster it the author must provide the evidence whether people or new homes in this area would continue using oil as their heating way. Also, the author should show some data about how many days this area experienced with below normal temperatures in the past several years. To better assess the recommendation, the author must provide some information about the Consolidated Industries which could be the major or only provider for oil heating, and provides some analytical reports that could at least proves Consolidated Industries have the potential to obtain benefits in the future.