What do you guys think?
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 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 underlie 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 its conclusion
The argument provided claims that the costs of a company named Olympic Foods will be minimized due to its high level of experience. Also, the author concludes that the company will be able to maximize its profits on basis of the reduction of costs. This argument is flawed in several ways and fails to consider several key aspects, on the basis of which the argument could be evaluated. The conclusion stated at the beginning relies on assumptions which there is no clear evidence for.
First, the author states that over a certain period of time, it is not exactly described how that periods will last or whether it will ever stop, organizations, in general will increase efficiency based on a surge of experience. But, the argument fails to consider specific evidence, for example in form of data, to support this statement. In order to strengthen the argument, the author includes an example which is clearly out of scope. The argument tries to take into account the process the film industry faced and tries to relate that to the processing of the food industry.
Second, the argument, by explaining the process of colored movies, does not give any clue whether the described trend, mentioned in the passage, is going to be continued. Furthermore, the author includes data, which does not provide sufficient information on the development in general by simply considering the range of prices over a period of 14 years.
Last, the author relates the information stated beforehand and draws a conclusion on the process if the company Olympic Foods. To his mind, due to the fact that the company is about to celebrate its 25th birthday, it has an advantage of experience. This will provide the company with the sufficient ability to reduce costs and consequently improve ist profits. Once again, one is left with not relevant data. In this context, it is not necessarily true that the reduction of cost results in an improvement of profits.
To conclude, the argument has several flaws and is more of a wishful thinking rather than substantial evidence. It would be strengthened if the authors had mentioned all of the relevant facts described above. In order to fully assess the merits of the situation, one needs to have full knowledge of all relevant facts. A comparison to the process of other companies in the food sector would be cruel to evaluate the argument.