Intern
Joined: 26 Feb 2015
Posts: 18
Given Kudos: 76
Location: Thailand
Concentration: Entrepreneurship, Strategy
GMAT 1: 630 Q49 V27
GMAT 2: 680 Q48 V34
GPA: 2.92
WE:Supply Chain Management (Manufacturing)
Can anyone review my AWA??
[#permalink]
23 May 2016, 21:47
To be honest, I spend a little more time than the limit.
Total 564 words in 40 minutes. Need to improve about timing though.
The following appeared as part of an annual report sent to stockholders by Olympic Foods, a processor of frozen foods:
“Over time, the costs of processing go down because as organizations learn how to do things better, they become more efficient. In color film processing, for example, the cost of a 3-by-5-inch print fell from 50 cents for five-day service in 1970 to 20 cents for one-day service in 1984. The same principle applies to the processing of food. And since Olympic Foods will soon celebrate its 25th birthday, we can expect that our long experience will enable us to minimize costs and thus maximize profits.”
Discuss how well reasoned . . . etc.
Olympic Foods concludes that the company can minimize cost and maximize profit because of long experience. The company’s lines of reasoning is that when organizations learn how to do things better over time, they will be more efficient and that there’s an example of that case, which is that the printing cost for 3-by-5 inch print fell down from 50 cents for five-day service in 1970 to 20 cents for one-day service in 1984. This argument is based on questionable assumptions and is logically unpersuasive for several reasons. In this essay, I will discuss reasons and examples to support my viewpoint.
To begin with, Olympic Food conclusion that the company can minimize cost and maximizes profit because of long experience is based upon the questionable assumption that if any company do things for a long time, it will learn to do those thing better. However, the fact that the longer experience, the better it become is doubtful. There no evidence that any company can learn and improve over time, because some companies can do the same practice repeatedly without any improvement. It may not true that practices make perfect if those practices are not efficient. Additionally, the change in the organization is quite hard to implement, especially in the large corporate. Because some people don’t like to change the way they use to work, the improvement in organizations may be difficult to obtain. Thus, it seems improbable to conclude that the company can minimize cost and maximizes profit because of long experience.
Moreover, Olympic Food assumes that if there’s some company success in improving cost overtime, this principle can be applicable for Olympic Food. The example for the argument is that the printing cost for 3-by-5 inch print fell down from 50 cents for five-day service in 1970 to 20 cents for one-day service in 1984. However, this example is based on different business and technology. The printing technology may advance a lot during that period. In contrast, the food business is still based on the agriculture and farming, which there’s few technology to breakthrough them. In additional, there’s no information about how the printing company reduce the printing cost, so it’s hard for Olympic Foods to follow the printing company practice. Therefore, this assumption is unreasonable, and Olympic Foods conclusion, in the absence of further evidence, is severely weakened as a result.
Furthermore, in concluding that the company can minimize cost and maximizes profit because of long experience, Olympic Food fails to consider that minimizing the cost may be able to lead to the increasing profit. Moreover, for example, some food company tries to lower its cost, but it leads to lower the quality. Thus, it will need to lower the selling price too. This may be seriously harmful to the company’s profit. Because Olympic Food argument lacks of evidence to show that the selling price will not be lowered, the conclusion that the company can minimize cost and maximizes profit because of long experience is logically unpersuasive.
Last but not least, to convince me that the company can minimize cost and maximizes profit because of long experience, Olympic Foods would have to provide evidences that it can improve the efficiency over time, it can follow the printing company practice and the selling price won’t fall over time. In absence of this information, Olympic food’s conclusion is untenable and I’m not convinced that.