Hi all!
Still in the early innings of prep, just wanted to gather some feedback on my first AWA. Be gentle (not!)
.
I tried to stick as much to the formula per the GMAT
OG so it's fairly brief.
AWA Argument
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.”
Discuss how well reasoned . . . etc.
The argument that processing costs decrease as organizations learn how to do things better and thereby become more efficient omits some important information that must be addressed to support the argument that, over time, Olympic Foods food processing costs will decrease and its profitability increase as well. The statement that follows the explanation of the theory is merely an industry example of how processing costs decreased in the film processing industry. This example alone does not provide enough information to support the argument that the same principle applies to the food processing industry and its applicability to Olympic Foods.
Most importantly, the argument does not address whether food processing is comparable to film processing and whether Olympic Foods has indeed gathered the expertise in reducing food processing costs.
First, the argument assumes that food processing and film processing are similar in nature. However, if both industries are intrinsically different, it might not even be possible to reduce processing costs in the food industry.
Second, the argument never addresses how long Olympic Foods has been processing food. It merely states that it will be celebrating its 25th anniversary. It never explicitly states that Olympic Foods has been processing foods for 25 years though.
Lastly, the argument does not create a link between reduced cost and profitability. It may in fact be the case that loss in revenue pressured industries to reduce costs. Thus, while costs may have declined, revenues might have decreased in lockstep with costs, thereby still depressing profitability.
By leaving out key information, the argument is not sound or persuasive. If it included the items discussed above instead of solely relying on the one example mentioned, the argument would have been more thorough and convincing.