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12 May 2018, 19:20
Kudos
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Hi everyone, I have just started studying for the GMAT (literally started ~2 weeks ago) and looking for some help on my AWA essay. Understand that I haven't contributed much to the GMATClub community but hoping I will do so as I progress and learn a bit more!
Question:
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.”
Answer
Olympic Foods has argued that it will be able to minimise costs and maximise profits due to its 25-year operating history. This argument is seriously flawed. Olympic Foods’ argument to stockholders includes imprecise wording and questionable evidence to justify its main conclusion.
Olympic Foods’ first statement – that “over time the costs of processing go down as organisations learn how to do things better…” is vague. It is not clear what is meant by the phrase “over time”. For example, if “over time” is meant to indicate a sufficiently long time period, say 50 years, this would not support Olympic Foods’ conclusion that it could minimise costs and maximise profits due to its 25th birthday. Furthermore the phrase “go down” is unnecessarily vague and gives no indication of the reduction in costs that could be expected.
The company also uses evidence from the colour film processing industry to support its conclusion. However, there is no reason that the reduction in the cost of 3-by-5-inch prints would have any bearing on the costs of processing frozen foods – a completely separate industry. Moreover, the colour film processing example does not validate the premise of “maximising profits” and instead only focuses on cost reduction. It is not clear that the reduction in colour film processing costs resulted in greater profits for the firms involved and as such the example undermines Olympic Foods’ main conclusion.
The argument would be strengthened if a relevant example from the food processing industry was used, instead of the example from the colour film processing industry. In addition, Olympic Foods could be more descriptive in their argument by stating the expected improvements in costs and profits rather than simply stating that they will be minimised and maximised respectively.
Olympic Foods’ argument is not well reasoned and includes vague wording and dubious evidence to support the argument. The use of more relevant and specific evidence as well as precise wording would better support its statement to stockholders.
Question:
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.”
Answer
Olympic Foods has argued that it will be able to minimise costs and maximise profits due to its 25-year operating history. This argument is seriously flawed. Olympic Foods’ argument to stockholders includes imprecise wording and questionable evidence to justify its main conclusion.
Olympic Foods’ first statement – that “over time the costs of processing go down as organisations learn how to do things better…” is vague. It is not clear what is meant by the phrase “over time”. For example, if “over time” is meant to indicate a sufficiently long time period, say 50 years, this would not support Olympic Foods’ conclusion that it could minimise costs and maximise profits due to its 25th birthday. Furthermore the phrase “go down” is unnecessarily vague and gives no indication of the reduction in costs that could be expected.
The company also uses evidence from the colour film processing industry to support its conclusion. However, there is no reason that the reduction in the cost of 3-by-5-inch prints would have any bearing on the costs of processing frozen foods – a completely separate industry. Moreover, the colour film processing example does not validate the premise of “maximising profits” and instead only focuses on cost reduction. It is not clear that the reduction in colour film processing costs resulted in greater profits for the firms involved and as such the example undermines Olympic Foods’ main conclusion.
The argument would be strengthened if a relevant example from the food processing industry was used, instead of the example from the colour film processing industry. In addition, Olympic Foods could be more descriptive in their argument by stating the expected improvements in costs and profits rather than simply stating that they will be minimised and maximised respectively.
Olympic Foods’ argument is not well reasoned and includes vague wording and dubious evidence to support the argument. The use of more relevant and specific evidence as well as precise wording would better support its statement to stockholders.
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