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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.
In the memorandum, the author recommends that implementing changes which used by one store to decrease operating expenses in our other stores will increase profits without jeopardizing good reputation. The author cites the following as evidence: (1) raising rental prices is not a viable way, because of our special bargains; (2) one store significantly decreased its operating expenses by closing at 6:00 P.M and by eliminating all old movies. The argument seems to be well-presented and reasonable at first glance; however, I am afraid that it can hardly bear further consideration because there are some flaws in it.
First and foremost, the author only mentions about the reduction of operating expenses in one store at downtown; however, since the main purpose of the action is to increase the profits and profits equals to the deduction of expenses from income, the author apparently ignores to provide the information of the income situation at that store. Now that many people will rest after a day's work and it is widely acknowledged that movie-rental store is a kind of place for recreation, the movie-rental stores must lose many customers if it closed at 6:00 P.M. rather than later. Considering that the night life in the city almost begin after 7:00 P.M., the author should check the last month income of the store in downtown to answer whether the loss outweighs the gain or not.
Furthermore, the author recommends eliminating all movies released more than five years ago to reduce its stock; however, this seems to be a very extreme method since many old but classic movies still have enormous markets. Comparing to simply eliminating them from the stock might even let the store loses its customers, it is wiser to give up some old movies which are scarcely rented by customers while keep some classic ones. In addition, it is possible that some customers cannot find what they want in the stores if the stores eliminate all old movies, which makes them to change to another movie-rental store. In that case, reducing the stock for increasing profits apparently does not worth it.
Moreover, besides the two ways to reduce the expenses, the author apparently does not take account of some other possible methods in existence which can also help to increase profits while keeping good reputation. These methods include something such as improve the level of management (like reducing unnecessary waste, properly using the source of advertisements), expand the peripheral business (such as open toy stores for children or takeout food for customers). After all, the best way to increase the profits is promoting the sale rather than decreasing the expenses.
To sum up, after pointing out so many obvious flaws in the argument, we can say that the evidence cited by the author can hardly be relied on. Before reaching a final conclusion, the author should make comprehensive investigation on the environment of store in downtown and need of the customers, in addition, the author should not ignore to taking account of other possible methods to decrease the expenses. 还望大家不吝赐教 |
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