Please rate my AWA
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26 Nov 2014, 20:25
"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."
The argument that the Olympic Foods Company will be able to minimize the costs and thus maximize the profits, just because after several years of operation it learns how to do things better, omits some important concerns that must be described in an annual report sent to stockholders to better substantiate the argument. The statement alone, reported in the annual report, does not constitute a valid and strong proof to support the main argument.
Most conspicuously, even if it is true that, overall, making always one specific thing over years helps to reduce the cost, it is not correct, as stated in the argument, that this will be the key to reduce the costs. The argument, for example omits that in a such period time of 25 years, machines have played an important role year after year, helping the company to standardize the making process and thus reduce the production costs. in addition, along this time period, another key factor is represented by the delocalization of the manpower in areas where the hourly rate is cheaper than in the original one. This aspect, together with the increase of import/export products trade mainly related to a more efficiency transportation way, represents one of the key factor to reduce the costs and increase the profits.
Another important point not addressed by the argument is related to the competition among an increased number of Company all over the world, that make the same things. This for sure will help to find competitive solutions to reduce the costs, otherwise one specific company will be out of the market if a non competitive revenue will be applied to the final product due to the high production costs.
In conclusion, because the argument leaves out several key aspect, it is not sound or persuasive. If it included the points discussed above instead of solely explaining an incomplete message, the argument would have been more through and persuasive.