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24 Feb 2018, 02:55
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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."
Discuss how well reasoned....
Explanation
The argument that since the color film processing cost fell over 14 years, the cost of processing food will also fall leaves out some important concerns that must be addressed to substantiate the argument.
Firstly, it obliviates any other cause to fall down the price of the color film processing. Secondly, it assumes that even if the learning curve will reduce cost then any other factor will not reduce the profit. And lastly, it compares two different industries without outlining similarities. The author assumes that there is only one factor which caused the fall in the cost of color film processing over 14 years i.e. the learning curve. Failing to recognize that in 14 years economy undergoes many changes, author negates the existence of any other cause and erroneously credits the fall of cost to the learning curve. For e.g. Over 14 years the government might have introduced subsidy on processing materials which led to the fall in the cost. Taking into account this assumption, the author could not substantiate the time period required to learn to do things better in food industry industries and without sufficient statistical proof makes a judgement that 25 years are sufficient for food processing industries. For e.g. in last few decades, the eating habits and food preference of people have changed rapidly. With ever-increasing competition, it is inevitable to sustain in long run without updating and introducing new techniques in the processing channels. Introduction of new techniques makes the learning curve steeper and difficult to achieve. Lastly, the author has compared two different industries without providing any comparable data. For e.g. the number of distinct machines required is much less in the color film processing than the food processing making the learning curve steeper in the later thus allowing cost to fall only after a very long time. The author did not address the issue of labour turnover in both the industries, if the labour turnover is higher in the food processing industry then it will make learning to do things better a gradual process or at times not feasible to achieve.
Having discussed above mentioned points, we can conclude that if author addressed above mentioned points, it would make the argument more persuasive and convincing.
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....
Explanation
The argument that since the color film processing cost fell over 14 years, the cost of processing food will also fall leaves out some important concerns that must be addressed to substantiate the argument.
Firstly, it obliviates any other cause to fall down the price of the color film processing. Secondly, it assumes that even if the learning curve will reduce cost then any other factor will not reduce the profit. And lastly, it compares two different industries without outlining similarities. The author assumes that there is only one factor which caused the fall in the cost of color film processing over 14 years i.e. the learning curve. Failing to recognize that in 14 years economy undergoes many changes, author negates the existence of any other cause and erroneously credits the fall of cost to the learning curve. For e.g. Over 14 years the government might have introduced subsidy on processing materials which led to the fall in the cost. Taking into account this assumption, the author could not substantiate the time period required to learn to do things better in food industry industries and without sufficient statistical proof makes a judgement that 25 years are sufficient for food processing industries. For e.g. in last few decades, the eating habits and food preference of people have changed rapidly. With ever-increasing competition, it is inevitable to sustain in long run without updating and introducing new techniques in the processing channels. Introduction of new techniques makes the learning curve steeper and difficult to achieve. Lastly, the author has compared two different industries without providing any comparable data. For e.g. the number of distinct machines required is much less in the color film processing than the food processing making the learning curve steeper in the later thus allowing cost to fall only after a very long time. The author did not address the issue of labour turnover in both the industries, if the labour turnover is higher in the food processing industry then it will make learning to do things better a gradual process or at times not feasible to achieve.
Having discussed above mentioned points, we can conclude that if author addressed above mentioned points, it would make the argument more persuasive and convincing.
27 Feb 2018, 09:40
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rishirajnarooka
Hi rishirajnarooka
Please find below the link which contains almost all the essays related to the GMAT exam (you might find similar essays like the one posted by you as well). These essays will guarantee you a score of 5-6 in the AWA section of the GMAT Exam.
https://gmatclub.com/forum/awa-compilations-109-analysis-of-argument-essays-86274.html
For any further queries please do get back to me. All the best for your exam preparation
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