Over time, the costs of processing go down because as organizations le
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07 Apr 2020, 08:57
Hi all,
I am a GMAT newbie who is hoping for some help grading my first sample AWA. Could anyone help review the essay below and provide any feedback please? Thanks, in advance!
All the best
Eric
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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.”
Discuss how well reasoned . . . etc.
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ESSAY:
The statement in Olympic Foods’ Annual Report is flawed on many levels, as it draws a faulty conclusion about increasing profits without providing sufficient supporting evidence from its main analogous industry, color film processing. The argument that profits will continue to increase also lacks merit because of its failure to specify the timing of such an increase, especially given the 25th anniversary of the company. The argument also uses overly vague language that could be clarified for better understanding.
The first glaring problem with the argument that Olympic Foods’ processing costs will decrease over time comes from the Annual Report’s comparison between the color film industry and the frozen food processing industry. Specifically, the Report fails to acknowledge the inherent similarities or differences between the two industries. Without providing evidence for why the frozen food processing industry will benefit from similar cost savings to the color film processing industry, the reader must trust the connection between the industries without any data proving such a link. This is problematic because color film processing may have unique properties such as technological advancements (ie. printers, film costs, and more) that are not applicable to frozen foods.
Second, the Report's argument does not address the timing of the cost decreases with enough specificity to convince readers that Olympic Foods will benefit from similar cost savings. For example, the Report claims that the cost decreases in the color film industry have occurred in the 14-year span from 1970 to 1984. Meanwhile, Olympic Foods is commemorating its 25-year anniversary, a time of much greater length than 14 years. This would imply that, over even more time, the frozen food processing industry may have already experienced such cost decreases. Under this assumption and without further data regarding the timing of such cost savings, the reader may reasonably assume that Olympic Foods has already gained efficiencies that may not continue to occur in the future.
Finally, the argument uses overly general and vague language to address organizational improvement, which may leave the audience dubious of the claim that Olympic Foods will become more profitable over time. The Report states that costs decrease because “organizations learn how to do things better.” This claim lacks the specificity that most readers would benefit from. For example, how do organizations learn to do things better? And which processes do they learn to do better? If an organization learns to handle human resources better, for example, their costs may still increase, leaving the company as a whole less profitable. In general, this claim requires more specificity to properly imply the potential benefits Olympic Foods may experience as time goes on.
In conclusion, the Annual Report’s claims about increased profitability is troubled in multiple aspects. The argument suffers from overly vague language that fails to address the critical analogy that the Report makes to the color film processing industry. The Report also would benefit from a deeper examination of the timing of cost decreases and how they might apply to the frozen food processing industry.