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.”
Here's my answer, would appreciate any feedback on it!
The argument claims that due to efficiency and long experience, Olympic Foods will be able to reduce costs and maximise potential. The conclusion of the argument is based on the premise that when an organization learns how to do things better, costs of processing go down. The conclusion of the argument relies on assumptions for which there is no clear evidence. Hence, the argument is unconvincing and has several flaws.
First, the argument readily assumes that the cost of colour film processing went down from 1970 to 1984 due to an efficient method of working. However, it fails to support the idea with evidence. The author does not explicitly mention if the processing time had been reduced from 5 days to 1 day, or if there were two different services being spoken about. With the argument given, the reader might assume that if anything, costs had increased from 50 cents for 5-day work to 100 cents for the same time period.
Second, the argument could have been much clearer if there was a strong link established between the photo industry and the food processing industry. The assumption that Olympic Foods will do well because a color-film processing industry did so is baseless and provides no information about any commonalities between these two. For example, we don’t know if there is any similarity between the processing techniques of color-film processing and food processing that would help increase efficiency.
Lastly, the argument confidently announces its assumption that since Olympic Foods had been in the market for 25 years, their long–term experience would enable them to minimize costs. The argument fails to mention the factors on the basis of which this argument could be evaluated. Even if the company does get more efficient, there is no clear indication that it is because of their longevity and not because of external factors like technology developments, and increased demand for processed food causing more innovation over the years, amongst other factors.
Without this information, the argument remains unsubstantiated and open to debate. If the items included above had been discussed in detail instead of solely providing broad statements, the argument would have been more convincing, sound, and persuasive to the stakeholders.