GMAT : Analysis of An Argument
26. The following appeared in a memorandum from a member of a financial management and consulting firm.
We have learned from an employee of Windfall, Ltd., that is accounting department, by checking about ten percent of the last month's purchasing invoices for errors and inconsistencies, saved the company some $10,000 in overpayments. In order to help our clients increase their net gains, we should advice each of them to institute a policy of checking all purchasing invoices for errors. Such a recommendation could also help us get the Windfall account by demonstrating to Windfall the rigourness of our methods.
Discuss how well reasoned you find this argument. In your discussion be sure to analyze the line of reasoning and the use of evidence in the argument. For example, you may need to consider what questionable assumptions underline the thinking and what alternative explanations or counterexamples might weaken the conclusion. You can also discuss what sort of evidence would strengthen or refute the argument, what changes in the argument would make it more logically sound and what, if anything, would help you better evaluate in conclusion.
In this argurnent a member of a financial management and consulting firm reasons that since Windfall Ltd. increased its net gains by checking 10 percent of its purchasing invoices for errors, it would be a good idea to advise the firm's clients to institute a policy of checking all purchasing invoices for errors.
Two potential benefits are foreseen from this recommendation. It could help the firm's clients increase their net gains and it could help the firm land the Windfall account.
The member's argument is unconvincing for a couple of reasons.
The main problem with the argument is that the conclusion is based upon insufficient evidence. The fact that some of Windfall's purchasing invoices contained errors might simply be attributable to the sloppy accounting practices of Windfall's suppliers. Thus, rather than indicating a general problem, the invoice errors might simply be indicative of a problem that is specific to Windfall Ltd. In other words, the evidence drawn from Windfall's experience is insufficient to support the conclusion that all purchasing invoices of all companies are subject to similar errors.
Secondly, the evidence offered in the argument suggests only that companies purchasing from the same suppliers that Windfall purchases from are likely to experience similar problems. If the firm's clients do not purchase from Windfall's suppliers, checking for errors might turn out to be a monumental waste of time.
In conclusion, the author's argument fails to provide good grounds for instituting the policy of routinely checking purchasing invoices for errors. To strengthen the conclusion the author would have to provide evidence that this is a widespread problem. Specifically, what are required are additional instances of purchasing invoices containing errors that are drawn from various companies.