Can someone please evaluate this.
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.”This passage suggests that as the experience of the company increases it enables company to minimize the cost and efforts and maximize the profits. It uses the example of Color film processing to prove this. But it does not consider the differences in color film processing and food processing. If the passage had given better comparison between them then this conclusion could have been considered. Without the proper evidences we can’t come to this result.
First the passage assumes that cost of processing goes down because organizations become more efficient at doing things. There is no proper evidence on how these two areas are related. For example, if the price of raw material increases or the wages given to employees increases then even if the company becomes more efficient it can’t lower its processing cost. There can be situation that costs of other factors rise significantly and hence processing cost also increases. If the passage considers all other factors that can affect the cost of processing, then we could have made that assumption.
Second the passage uses the example of Color filming processing to back his conclusion about Olympic foods. This is flawed because there are many differences in the film processing and food processing that are not taken into consideration. For example, Food processing requires a greater number of employees in comparison to film processing. There can be a situation that the demand of color film processing changed significantly and hence its prices changed, so in this condition the efficiency has nothing to do with decreased price. If the passage addresses these differences and present relevant examples to show resembles between the two industries then we could have made that conclusion.
Finally, the conclusion made by the passage that since Olympic foods is celebrating its 25th birthday, it can expect to minimize the costs and maximize profits can hold true if get the answers of above-mentioned questions. If the above-mentioned facts such as the effects of other factors such as cost of raw material, wages of employees, market demand of products are taken into consideration then the conclusion of the passage can hold. Without taking these factors into consideration we can’t conclude anything.
Thankyou in advance.