“Overtime, 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 days 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.”
It is hard to believe that the long experience of Olympic Foods will enable them to minimize costs and thus maximize profits, since the assumption based on which that conclusion is made is incredible and supported by a false example. The vagueness and lack of supportive evidences have made the argument sounds unconvincing and invalid.
Firstly, the author assumes that experienced organizations has lower costs of processing because they become more efficient by learning how to do things better. This is not always the case when there are many factors attributed to those costs, so it even costs organizations more as they advance their process. To illustrate, as the years gain, an organization would know to reduce several processing steps and make use of wasted materials in order to save a few costs. However it does not constitute much to the product’s price in the context that the inputs’ price is inflated and the organization would invest on new technologies to expand their production and increase product quality. There is no way that installing new advanced machines is cheap thus the organization would even incur more costs which leads to higher product price. In reality, the prices of many products are increasingly rise along with time due to the reason above. For example, the price of milk was 10 cents per a little box when I was a ten years old child, but it is 30 cents for a same size box now, triple as the previous price after thirteen years. Thus developing does not mean the costs are lower.
Secondly, the example is even counter-evidence to the argument’s assumption of lowering the costs as more years added because the author did not make a correct logical reasoning. Though the price of a 3-by-5-inch print is 20 cents in 1984 but it is for only one service day. That means it costs 100 cents for 5 five days service so it costs even more 50 cents than in 1970 when the price was only 50 cents for five days service. Therefore the price of printing service, in fact, increases along with time. The author also did not specify particularly who that print company is so the evidence is not useful.
Otherwise, the situation of this argument still can be possible if the author uses more persuasive reason and information. The organizations may reduce costs by expanding their production and producing more goods based on their exist resources. The longer period they engage in business activity, they collect more profits and use them to reinvest on opening more plants and buying more machines to produce in a larger scale. The economic principle suggests that the cost per product will be cheaper as the production scale increases until the breakeven point. For instance, although the price of milk in my previous example may rise much higher, it may due to the inflation and the overall cost per product might have decreased according to the larger scope of the national milk company.
Finally, the conclusion is weak because it has not been propped up at all by its premise and example. However it would be convincible if being provided with other reasons, more and better illustrations.
It tooks me several hours to finish this one 
and everything still seems to be a chaos. I will pratise more and hard with your comments and supports. I have only more than 20 days left until the exam day, in a very haste so I appreciate your help very much! 
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07 Aug 2012, 20:34
