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 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 its cost will go down, thereby increasing its profits, on its 25th birthday. The argument relies on cost reduction which it claims hinges on increased efficiency over time. The reduction in color film processing costs is used as evidence.
In my considered view, the argument makes the classic slippery slope fallacy. Only because costs in color film processing have reduced over time and gained efficiency in the process does not mean that processed foods industry will experience the same trajectory. Efficiency gain is determined by numerous variables which may vary from industry to industry. For instance, the development of faster color processing softwares led the efficiency growth in the industry. However, faster food processing tools may or may not be discovered. There is a possibility that food processing may already be at its best technologically advanced stage, a point from where further efficiency gains become more difficult. In sum, due to the fundamental distinction in the nature of color film and food processing industries, it is unreasonable to argue that an effect experienced in one will replicate in the other.
One fundamental assumption in the prompt is that over time organizations learn how to do things better. There are numerous examples of corporations that infact did not learn over time and had to shut down because of repeated losses. Furthermore, learning may not necessarily lead to efficiency. For instance, a corporation may be aware of the reasons why its workforce is unproductive but may lack the resources to make the necessary change in order to increase productivity, or perhaps it may have different priorities. Therefore, learnings about how to do things better may not transform into increased efficiency.
Evidence from the same industry or comparable developments may help strengthen the argument. Evidence that after a certain amount of time, the costs start rising, shown by the average cost curve in microeconomics, may refute the argument.
In my view, making the time frame specific such as the first few years of inception and then citing evidence form the same industry of companies that cut costs through learning during this time period may strengthen the argument. To better evaluate the conclusion, data stating the trend of cost cutting through learning among companies may help. An expert's view on the trajectory of cost among corporations may add further value to the argument.
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