The following appeared in a memo from the new vice president of Sartorian, a company that manufactures men's clothing.
"Five years ago, at a time when we had difficulty obtaining reliable supplies of high-quality wool fabric, we discontinued production of our popular alpaca overcoat. Now that we have a new fabric supplier, we should resume production. Given the outcry from our customers when we discontinued this product and the fact that none of our competitors offers a comparable product, we can expect pent-up consumer demand for our alpaca coats. This demand and the overall increase in clothing prices will make Sartorian's alpaca overcoats more profitable than ever before."
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.
There are at least four key questions that need to be addressed prior to assessing the Vice-President's message that the company should return to manufacturing the old alpaca coat line. Without addressing these issues, investors and the board are cautioned against any hasty decisions.
First, the vice president does not clearly state that the company stopped making the overcoat because they did not have reliable suppliers for high quality wool. It very well may be the case that there was a correlation between the company's halt on manufacturing the overcoat and a lack of suppliers for wool; however, this correlation may just be coincidental. For instance, it may be the case that the company stopped making the overcoat because demand dropped and also because the supply for wool was unreliable; but, this connection does not entail that necessary connection between these two events. For all we know, the lack of a reliable supplier for wool may have been a blessing in disguise five years ago. To be blunt, the previous reasons for the halt will be required prior to assessing the vice-president's prediction.
Second, information concerning the materials used in manufacturing the coat is lacking in the vice-president's pronouncement. Was wool in fact a key material in creating the overcoat? Unfortunately, we are not given this information. Consider what would happen if the overcoat contained less than 0.1% wool. In that case, it just does not seem likely that the reason the company stopped making the coat was because there was a lack in reliable wool. Prudent advice to an investor required to make a decision on the information supplied by the VP of the company would be to demand more information on the raw materials for the coat.
Thirdly, styles change rapidly. A general rule of thumb in the fashion industry is that last year's demand is not reliable indicator for this year's consumer desire. Bringing a style back from the past requires much more than simply placing it on the shelf. Advertising and marketing ideas must be prudently developed and released to the pubic. Imagine what would happen if a major retail chain attempted to, in one full swoop, bring back the top hat from the early 19th century. It's just not likely that styles can survive their grave. Prior to making a decision, investors and the board of the company must gather input from the marketing teams at work in the company.
Lastly, does the new fabric supplier carry the raw materials needed for the coat? Of course, the implication of the VP is that the new supplier is critical in our plans to bring the overcoat back onto the market, but consider what might happen if the new supplier does not even carry the product to meet our needs. In that case, our past efforts involving the marketing team would be in vain, and the time investing in bring the coat back to life would surely be wasted.
Prior to making a decisions regarding the message, the company is cautioned against approving the imperative of the Vice President to bring back the 5 year old clothing line.
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