Over time, the costs of processing go down because as organizations

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 twenty-fifth 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.

ESSAY

Taking the example of color film processing industry the argument states that as time passes an organization gets better at doing what it does, leading to more efficient processes and bringing the cost down. The author then makes an assertion that because Olympic Foods has experience of close to 25 years in the frozen food processing industry, it will also bring its costs down and maximize its profits. The argument is based on an ill-conceived assumption that whatever happens in one industry will definitely happen in another and every organization will have the same result. It fails to account for the differences and the similarities between the two mentioned industries. Thus, the argument is flawed, hasty and without convincing evidence and assumptions.

Firstly, the author assumes that every corporation that has been in a business for a long time learns to do things better and Olympic Foods has necessarily learned how to do things better. There are ample examples in the world where corporations, though big and old, failed to embrace changes in their production processes and perished as they were not able to compete with more efficient competitors. For example, the fate of handloom companies during the time of the industrial revolution, the decline of Dell, Inc. etc

Secondly, the argument assumes that whatever happened in the color film processing industry can be replicated in the frozen food processing industry. The author fails to account for the differences between the color film processing industry and the frozen food processing industry. For example, factors aiding the improvement of processes in the color film processing industry might be the availability of high skilled labor, the high demand for the product, etc.

Thirdly, the author is wrong to conclude that because an industry like the color photo was able to bring down the cost of production, the same will happen with Olympic Foods as well. There can be many factors contributing to the lowered cost of production. The color film industry might have access to high-quality human capital, located in a more politically stable country. On the other hand, Olympic Foods must not have money to afford higher-skilled employees, might have less efficient management, etc

In conclusion, the argument is flawed, and had the author accounted for the similarities between the color film processing industry and frozen food industry, the argument would have been strengthened. Additionally, the author should have provided evidence that Olympic Foods over the years has actually improved many of its processes to strengthen our belief in the author’s argument.