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GMAT Practice AWA - would love feedback...

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Intern
Joined: 11 Mar 2018
Posts: 1
GMAT Practice AWA - would love feedback...  [#permalink]

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11 Mar 2018, 05:39
Prompt:

"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.”

Response:

The Olympic Foods report is flawed for various reasons. The first reason is that a food processing company is comparing their work to a film processing company, which are very different fields. Secondly, they assume that the film processing company's costs decreased due to the company becoming more efficient, but did not take into account any technological developments of the time. Finally, they assume that because they are 25 years old they are best able to cut costs simply because of the age of the company.

Olympic Foods lacked sufficient evidence to claim that film processing and food processing were similar enough to expect a decrease in processing costs and an increase in profit. There would need to be clear concise evidence that the same materials and mentality surrounding the two fields are similar enough that they could support each other. Such evidence could be, film processing and food processing both use the same flash freeze method to capture the bold color of the fruit and of the subject of the film. This would have provided a connection between the two processes that helped to support the claim that Olympic Foods was trying to create.

From 1970 to 1984 there could have been immense technological gains in the film processing world that allowed such companies to print materials at higher rates with less cost. However, without providing evidence that the processing of food and film is similiar, there is no way to know if the same technological gains could assist Olympic Foods in the same way. If Olympic Foods had provided evidence such as, from 1970 to 1984 the technology surrounding the freezing process of food has allowed us to freeze fresh fruits or vegetables in half the time at half the cost, it would provide evidence that as time goes on Olympic Foods could expect a decrease in processing costs and an increase in profit.

In the report, Olympic Foods assumes that age is the best indicator of process and profit, but lacks evidence to support the claim. In reality, Olympic Foods could have been at the top of their game when they first started because they were the first in the nation to provide such services. Or they did in fact have the best quality when the company was at an earlier stage. However, Olympic Foods doesn't provide evidence that as the company has aged management has also stayed with or ahead of the times in terms of management practices and processes. It could be the case that Olympic Foods still processes food the same way it did as when it first started. Which could mean that the company is actually falling behind in best practices, best technology and faster ways to get their food to the market. With evidence such as, every year we look at industry standards and then go beyond those set by the safety board to ensure we have the best product on the market. Or every two years we continually update our machines to ensure they are of the best quality. With something like, we ensure that we source our food from farms that follow rigorous food safety standards to guarantee quality to our company. That sort of evidence would help support Olympic Foods in saying that they had learned over the past 25 years as the company has grown, and that they will continue to learn.

The reasons above demonstrate that Olympic Foods did not provide sufficient evidence to support their claim that the age of the company automatically equates to process improvement and profit increase.
Current Student
Joined: 27 May 2014
Posts: 525
GMAT 1: 730 Q49 V41
Re: GMAT Practice AWA - would love feedback...  [#permalink]

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12 Mar 2018, 07:33
You can evaluate yourself here:
http://www.gmatawa.com/
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Re: GMAT Practice AWA - would love feedback... &nbs [#permalink] 12 Mar 2018, 07:33
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