The following appeared in a memo from a vice president of a large, highly diversified company.” Ten years ago our company had two new office buildings constructed as regional headquarters for two regions. The buildings were erected by different construction companies — Alpha and Zeta. Although the two buildings had identical floor plans, the building constructed by Zeta cost 30 percent more to build. However, that building’s expenses for maintenance last year were only half those of Alpha’s. In addition, the energy consumption of the Zeta building has been lower than that of the Alpha building every year since its construction. Given these data, plus the fact that Zeta has a stable workforce with little employee turnover, we recommend using Zeta rather than Alpha for our new building project, even though Alpha’s bid promises lower construction costs.”

The following appeared in a memo from a vice president of a large, highly diversified company.

“Ten years ago our company had two new office buildings constructed as regional headquarters for two regions. The buildings were erected by different construction companies — Alpha and Zeta. Although the two buildings had identical floor plans, the building constructed by Zeta cost 30 percent more to build. However, that building’s expenses for maintenance last year were only half those of Alpha’s. In addition, the energy consumption of the Zeta building has been lower than that of the Alpha building every year since its construction. Given these data, plus the fact that Zeta has a stable workforce with little employee turnover, we recommend using Zeta rather than Alpha for our new building project, even though Alpha’s bid promises lower construction costs.”

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.

The memo asserts that ‘ten years ago our company had two new office buildings constructed as regional headquarters for two regions. The buildings were erected by different construction companies — Alpha and Zeta. Although the two buildings had identical floor plans, the building constructed by Zeta cost 30 percent more to build.’ This statement implies several things: first, that the buildings in question were identical, and second that the price to build them was identical as well. The memo does not explain what these buildings are, so it is impossible to tell whether these assumptions are true. If the buildings are different, the assumption about cost could be incorrect and the argument would prove invalid.

However, if the buildings are the same, the decision to build them based on cost alone would be unwise. The assumption about cost would be correct, but the cost to build them would not be the only factor in the decision. Zeta’s building might be using energy-efficient materials, while Alpha’s uses cheaper materials. The extra cost of materials might easily offset the saving in energy costs. If the company’s budget allows it, it might even make sense to build both buildings with Zeta’s materials, whereas Alpha’s building might be replaced entirely.

The memo goes on to say that ‘the building constructed by Zeta has consumed less energy every year since its construction.’ Again, this statement is false. The energy consumed per year could be much different this year than last; energy consumption varies greatly throughout the year. If the memo is correct, it could be because the Zeta building uses more energy-efficient equipment. Another possible explanation is that the employees in the Zeta building are far more productive and there are fewer employees in the building, thus making it easier to maintain. If it is clear that the building saves the company money by reducing energy expenses and maintenance, then the company might choose to stay with Zeta. It would certainly make sense to try to save as much money as possible, but the company should not base its decisions on cost alone.

In summary, the vice president’s memo makes several assumptions about the two buildings in order to arrive at the conclusion that the company should build the building that costs more. If the company decides to build the Alpha building, it will need more information than the memo provides in order to determine if the recommendation and the argument on which it is based are reasonable.