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01 Jan 2022, 14:24
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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.”
My response:
The annual report argues that since the cost of processing goes down as organizations learn how to do things better overtime, Olympic Foods is expected to minimize costs and maximize profits as it approaches its 25th birthday. This argument, as it currently stands, is seriously flawed as it is based on various unsupported assumptions discussed below.
Firstly, the example cited by the author states that in color film processing cost of 3-by-5-inch print fell from 50 cents for five days service in 1970 to 20 cents for one day service in 1984. This example opposes the claim made in the first sentence of the passage rather than strengthening it. This is because it is incorrectly comparing total processing cost for 5 days versus total processing cost for one day. If the per day cost is calculated, it turns out that in 1970, per day cost was 10 cents whereas that in 1984 was 20 cents, thereby indicating that as time increased, the cost of processing also increased. To strengthen the argument, the author must provide a better example where comparison is made between costs based on the same comparable parameters.
Moreover, the passage provides an example of the cost of film processing and applies the same principle to food processing. This comparison does little to support the author's argument because comparing film processing with food processing is like comparing apples with oranges. These two are different industries and their micro and macroeconomic factors affecting their costing, pricing, etc., are not comparable. It is possible that there are certain factors that could lead to increase in food processing cost over time due to factors affecting food processing industry, which might not be the case in film processing industry. Hence, to improve this argument, the author should compare costs of similar industries to arrive at a more concrete conclusion.
Finally, the author asserts that since Olympic Foods is about it celebrate its 25th birthday, the long experience is expected to minimize costs and maximize profits. It cannot be denied that a long experience could lead to efficiencies in processes, leading to reduction in costs overtime, but one must also understand that this principle does not hold true if other factors involved in the process do not remain the same. For example, if the process requires a heavy investment in some equipment or if the raw material changes leading to increase in fixed and variable costs, respectively, then no matter how long the company has been in business, the costs will increase and possibly lead to reduction in profits. To further improve this argument, the author must provide additional evidence that could support the over-optimistic assumptions here.
To summarize, the argument suffers from various logical fallacies such as inaccurate comparisons and over-optimistic and extreme conclusions, due to which it remains vulnerable to criticism. Until the author resolves these flaws by introducing further required information, the argument remains unconvincing and debatable.
“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.”
My response:
The annual report argues that since the cost of processing goes down as organizations learn how to do things better overtime, Olympic Foods is expected to minimize costs and maximize profits as it approaches its 25th birthday. This argument, as it currently stands, is seriously flawed as it is based on various unsupported assumptions discussed below.
Firstly, the example cited by the author states that in color film processing cost of 3-by-5-inch print fell from 50 cents for five days service in 1970 to 20 cents for one day service in 1984. This example opposes the claim made in the first sentence of the passage rather than strengthening it. This is because it is incorrectly comparing total processing cost for 5 days versus total processing cost for one day. If the per day cost is calculated, it turns out that in 1970, per day cost was 10 cents whereas that in 1984 was 20 cents, thereby indicating that as time increased, the cost of processing also increased. To strengthen the argument, the author must provide a better example where comparison is made between costs based on the same comparable parameters.
Moreover, the passage provides an example of the cost of film processing and applies the same principle to food processing. This comparison does little to support the author's argument because comparing film processing with food processing is like comparing apples with oranges. These two are different industries and their micro and macroeconomic factors affecting their costing, pricing, etc., are not comparable. It is possible that there are certain factors that could lead to increase in food processing cost over time due to factors affecting food processing industry, which might not be the case in film processing industry. Hence, to improve this argument, the author should compare costs of similar industries to arrive at a more concrete conclusion.
Finally, the author asserts that since Olympic Foods is about it celebrate its 25th birthday, the long experience is expected to minimize costs and maximize profits. It cannot be denied that a long experience could lead to efficiencies in processes, leading to reduction in costs overtime, but one must also understand that this principle does not hold true if other factors involved in the process do not remain the same. For example, if the process requires a heavy investment in some equipment or if the raw material changes leading to increase in fixed and variable costs, respectively, then no matter how long the company has been in business, the costs will increase and possibly lead to reduction in profits. To further improve this argument, the author must provide additional evidence that could support the over-optimistic assumptions here.
To summarize, the argument suffers from various logical fallacies such as inaccurate comparisons and over-optimistic and extreme conclusions, due to which it remains vulnerable to criticism. Until the author resolves these flaws by introducing further required information, the argument remains unconvincing and debatable.
02 Jan 2022, 06:18
Kudos
Bookmarks
AWA Score: 5 out of 6
I have used a GMAT AWA auto-grader to evaluate your essay.
Coherence and connectivity: 5/5
This rating corresponds to the flow of ideas and expressions from one paragraph to another. The effective use of connectives and coherence of assertive language in arguing for/against the argument is analyzed. This is deemed as one of the most important parameters.
Paragraph structure and formation: 3.5/5
The structure and division of the attempt into appropriate paragraphs are evaluated. To score well on this parameter, it is important to organize the attempt into paragraphs. Preferable to follow the convention of leaving a line blank at the end of each paragraph, to make the software aware of the structure of the essay.
Vocabulary and word expression: 3.5/5
This parameter rates the submitted essay on the range of relevant vocabulary possessed by the candidate basis the word and expression usage. There are no extra- points for bombastic word usage. Simple is the best form of suave!
I have used a GMAT AWA auto-grader to evaluate your essay.
Coherence and connectivity: 5/5
This rating corresponds to the flow of ideas and expressions from one paragraph to another. The effective use of connectives and coherence of assertive language in arguing for/against the argument is analyzed. This is deemed as one of the most important parameters.
Paragraph structure and formation: 3.5/5
The structure and division of the attempt into appropriate paragraphs are evaluated. To score well on this parameter, it is important to organize the attempt into paragraphs. Preferable to follow the convention of leaving a line blank at the end of each paragraph, to make the software aware of the structure of the essay.
Vocabulary and word expression: 3.5/5
This parameter rates the submitted essay on the range of relevant vocabulary possessed by the candidate basis the word and expression usage. There are no extra- points for bombastic word usage. Simple is the best form of suave!
Please follow the AWA forum rules before posting anything in this forum; read the rules in the post in the link below
https://gmatclub.com/forum/awa-forum-ru ... 64141.html
Good Luck
KM121132
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