47) The following appeared in a memorandum from the owner of Movies Galore, a chain of movie-rental stores.
Because of declining profits, we must reduce operating expenses at Movies Galore's ten movie-rental stores. Raising prices is not a good option, since we are famous for our low prices. Instead, we should reduce our operating hours. Last month our store in downtown Marston reduced its hours by closing at 6:00 p.m. rather than 9:00 p.m. and reduced its overall inventory by no longer stocking any DVD released more than five years ago. Since we have received very few customer complaints about these new policies, we should now adopt them at all other Movies Galore stores as our best strategies for improving profits.
Write a response in which you discuss what specific evidence is needed to evaluate the argument and explain how the evidence would weaken or strengthen the argument.
111) The following appeared in a memorandum from the owner of Movies Galore, a chain of movie-rental stores.
In order to stop the recent decline in our profits, we must reduce operating expenses at Movies Galore's ten movie-rental stores. Since we are famous for our special bargains, raising our rental prices is not a viable way to improve profits. Last month our store in downtown Marston significantly decreased its operating expenses by closing at 6:00 P.M. rather than 9:00 P.M. and by reducing its stock by eliminating all movies released more than five years ago. By implementing similar changes in our other stores, Movies Galore can increase profits without jeopardizing our reputation for offering great movies at low prices.
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 are for the argument if the assumptions prove unwarranted.
112) The following appeared in a memorandum from the owner of Movies Galore, a chain of movie-rental stores.
In order to reverse the recent decline in our profits, we must reduce operating expenses at Movies Galore's ten movie-rental stores. Since we are famous for our special bargains, raising our rental prices is not a viable way to improve profits. Last month our store in downtown Marston significantly decreased its operating expenses by closing at 6:00 p.m. rather than 9:00 p.m. and by reducing its stock by eliminating all movies released more than five years ago. Therefore, in order to increase profits without jeopardizing our reputation for offering great movies at low prices, we recommend implementing similar changes in our other nine Movies Galore stores.
Write a response in which you discuss what questions would need to be answered in order to decide whether the recommendation and the argument on which it is based are reasonable. Be sure to explain how the answers to these questions would help to evaluate the recommendation.
C1: In order to reverse the recent decline in our profits, we must reduce operating expenses at Movies Galore's ten movie-rental stores.
G1: Since we are famous for our special bargains,
C2: raising our rental prices is not a viable way to improve profits.
G2: Last month our store in downtown Marston significantly decreased its operating expenses by closing at 6:00 p.m. rather than 9:00 p.m. and by reducing its stock by eliminating all movies released more than five years ago.
C3: Therefore, in order to increase profits without jeopardizing our reputation for offering great movies at low prices, we recommend implementing similar changes in our other nine Movies Galore stores.
A1 (C1): High operating expenses is the main cause of decline in profits.
A2 (G1, C2): Raising rental prices would jeopardise the store's reputation for the special bargain.
A3 (G2): The measure would not affect the sales revenue of the store in Marston.
A4 (G2, C3): The measure is suitable for other stores.
the reason why the profits have declined
- maybe the decline is caused by the decrease in revenue (measures should be taken to increase revenue)
- if the expenses have increased, what are the causes? (labor cost or overhead?)
whether raising the price would hurt the reputation and the revenue
- maybe the price is still competitive after the price increase
- how sensitive the customers are to the price change (maybe the revenue will increase)
the business records during 6pm to 9pm in the other 9 stores
- maybe more revenue has been generated during these hours
- look into the labor and overhead costs during these 3 hours
the business records related to the older movies
- compare the stocking expense and the revenue generated