"For many years all the stores in our chain have stocked a wide variety of both domestic and imported cheeses. Last year, however, the five best-selling cheeses at our newest store were all domestic cheddar cheeses from Wisconsin. Furthermore, a recent survey by Cheeses of the World magazine indicates an increasing preference for domestic cheeses among its subscribers. Since our company can reduce expenses by limiting inventory, the best way to improve profits in all of our stores is to discontinue stocking many of our varieties of imported cheese and concentrate primarily on domestic cheeses."
WORDS: 560 TIME: 0:30:00 DATE: 2006-4-3
In this argument, the author suggests that in order to improve profits in all of our stores, we should reduce expenses by limiting inventory. The way he suggests is that stop stocking many of our varieties of imported cheese and concentrate primarily on domestic cheeses. In order to substantiate his assumption, the author cites that five best-selling cheeses at our newest store were all domestic cheese last year. In support of his conclusion, the author points out that a recent survey shows that there in an increasing preference for domestic cheeses. A careful examination toward this argument, we will found it is fraught with problematic assumptions.
The major problem with this argument is that customer preference, no matter from the best-selling product or magazine survey, does not necessary lead to larger profit. It is quite possible that the best-selling of domestic cheeses result from their attracting prizes, but in fact the company earns little from the product. That might be the real reason of the increasing preference discovered by the magazine. Even the imported chesses are less popular it is likely that they focused on upper-level family. So even they sell less they earn more. A sudden reduce on the inventory of imported cheeses may unwillingly leads to a decrease of profit. The way to reduce stocking is alternative, we find no information that we should reduce the inventory of imported cheeses to get a better profit.
Even we granted that customers' favorite food leads to higher profit, the customers' preference rest on gratuitous evidence. There’s no exact evidence to show that customers’ really prefer domestic cheeses than imported ones. The data collected from the newest store is unwarranted. A single store means nothing. The author oversimplified the complex situation of different stores such as demographic and population. Even we concede that the newest store stands for all the stores, data we concerned only last year is unreasonable. We also need to concern that the survey conducted by the magazine in questionable. Its subscribers may not hold the same attitude as the general population, and we don't get any specific information about how the survey is conducted and whether there is misleading questions.
Another flaw weakens the author's argument is that it commits a fallacy of false dilemma to cut the inventory of two kinds of cheeses. In order to improve profits, we have a variety of ways to reduce cost and increase income. We may try to find better whole-seller with lower prizes of cheeses, we may manage to reduce transportation cost, or we can try to encourage workers to improve their efficiency. In order to increase income, we may try to provide better service and choose strategies to encourage customers buying more, as well as attracting more customers. All above can be good ways to increase profits, and as a matter of fact, we may not necessarily increase profits from reducing our inventory at all.
In conclusion, we need real reason for customer's preference of domestic cheese to figure out whether the increasing of domestic cheese is profitable. And we should focus on both data from the store and survey to ensure that it is valid. At the same time, we need to search for more improvements to promote the profits of the company, which might be the real way but reducing the inventory to increase the profits.