Over time, the costs of processing go down because as organizations

"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 is for the Olympic food argument stated above.


Argument that long industry experience of Olympic Foods will lead to better efficiency and thus to minimizing costs, and increasing profits, makes certain assumptions, which are flawed. Drawing an analogy along color film industry is like comparing apples and mangoes, and doesn’t help in substantiating the argument.
Argument draws an analogy along color film processing industry that merely explains the fall in the prices that the color film processing saw, without addressing the facts, which would actually lead to fall in the processing costs of frozen foods. Secondly, argument assumes that the decrease in the price of processing color films was solely due to better efficiency of the industry. But if the prices were affected because of the market demand and market competition for the raw material used in the processing of color films, a similar pattern has to be followed in frozen food industry so as to see a decrease in the processing cost. Lastly, argument assumes that mere decrease in the processing cost will lead to increase in profit margins, thereby ignoring other factors such as cost of the raw material, which could be a deciding factor in profit margins.
In conclusion the argument fails to shed light on strong logical factors, which could actually convince the shareholders, that there will be a decrease in processing cost and thus an increase in profit margins.

Hi deveshpaliwal, welcome to gmat club!!

First of all you really need to check the chinese burned guide on AWA in this forum. That will be a great helping tool for you.

Secondly, your word count in the essay is 226, which is quite less in terms of the essay requirement. Essay structure also needs to be improved.

Best of luck and keep us posted once you go through th AWA guide.

Hey, thanks for your inputs, yesterday after posting my AWA, I did came across the chinese burned guide, and here is an essay based on its inputs, please review and let me know the faults, as i wish to have a concrete template ASAP, so that I can practice it for a longer period...
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The argument claims that with increase in the industry experience of Olympic foods, it will increase its efficiency, which in turn would lead to lower processing costs and more profit margins. Stated in this way the argument fails to mention several key factors on the basis of which it can be evaluated. The conclusion relies on assumptions for which there is no clear evidence. Therefore the argument is rather weak, unconvincing and have several flaws.

Firstly, argument readily assumes that better efficiency will lead to decrease in the costs of processing. This statement is a stretch and not substantiated in any way. There are numerous other factors which can affect the costs of processing. For instance if the improvement in the efficiency of the frozen food processing was a result of an expensive, high quality machinery, and highly skilled labor , they would compensate for the cost decrease which is mentioned in the argument.

Secondly, argument draws an analogy along the color print industry, to make its point. This again is flawed, as the argument doesn’t demonstrates any co-relation between these 2 industries. To illustrate, the decrease in the price of color film from 1970 to 1984, is not substantiated with evidences which lead to that decrease. For example, the decrease in the cost could have been due to decrease in the cost of raw material used in processing of color prints. If any such co-relation had been shown for the frozen food processing industry, in relation to decrease in the raw material used, the argument would have sounded a bit more convincing.

Finally, the argument concludes that a decrease in the processing costs of the frozen food will eventually lead to increase in profit margins. Through this conclusion, again the argument fails to consider other factors which could affect the profit margin of the company. Without supporting evidences and examples to illustrate that other costs will also be reduced, one is left with an impression that the claim of better profits is more of a wishful thinking.

In conclusion the argument is flawed and therefore unconvincing. It could be considerably strengthened if all relevant facts were mentioned. In order to come to a certain conclusion, it is essential to have a full knowledge of all contributing factors.



Waiting eagerly for a response,
Thanks, Devesh Paliwal.

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."

The argument claims that over time, the costs of processing drop since when companies learn how to do things better, they will be more efficient. In order to proof this hypothesis, the author gave an example in color processing industry. Ultimately, the author concluded that since Olympic Foods will soon celebrate its 25th birthday, its long experience will attribute to minimize costs and therefore maximize profits. Stated in this way, the argument fails to mention several key factors, on the basis of which it could be evaluated. The conclusion of the argument relies on assumptions, for which there is no clear evidence. Hence, the argument is rather weak, unconvincing and has several flaws.

First, the argument readily assumes that whatever happened with color film processing industry will be duplicated with food processing industry. As a result, food processing cost will decrease since color film processing cost fell over the years. This statement is a stretch, not substantiated in any way. There are numerous factors that make the business costing of these two industries different. For example, while for color film processing, technology and machinery cost are the main costs of product, for food processing, labor and chemistry costs are primary costs. Possibly, in 1970, color film companies fortunately paid much less technology and machinery costs thanks to an invention. However, that does not happen with food processing industry. Food processing costs of a company at the 25th year of operation might not be lower than that at the 10th year of operation if labor and chemistry costs continuously increased during surveyed period. The argument would have been much clearer if it explicitly stated that similar things will happen between two mentioned industries.

Second, the argument claims that a company with long experience will be more efficient along the way and therefore, minimize costs. This is again a very weak and unsupported claim since the argument fails to address the correlation between experience length and efficiency. To illustrate, company A with longer experience does not necessarily do things better than company B with shorter experience. In fact, it is not at all clear that company A who spends more time doing a product will invest time, money and effort in improving the way it produces. Possibly, company A only hires low-skilled workforce and uses out-of-date machinery, leading to low productivity and poor product quality. As a result, the costs of product in company A do not decrease. If the argument had provided evidence that a long experience company do improve its efficiency, the argument would be a lot more convincing.

Third, assuming that the costs of food processing of Olympic Foods do minimize, how can someone be sure that Olympic Foods' profits will be maximized? What would happen if Olympic Foods used low-cost chemicals, which is the primary cost for food processing, in order to minimize the costs but failed to maintain its high-quality foods which led to a considerable drop in revenues? Without convincing answers to these questions, one is left under an impression that the claim is of a wishful thought rather than a substantive evidence. As a result, the conclusion has no leg to stand on.

In summary, the argument is flawed for above-mentioned reasons and therefore unconvincing. It could be considerably strengthened if the author clearly mentioned relevant facts. In order to assess the merits of certain situation, it is necessary to have a full knowledge of all contributing factors.

The content and structure of the essay are pretty strong, but the grammar is confusing at best.

"since when" is an awkward phrase. try "because as".

proof=noun, prove=verb

You change your verb tenses a lot--use all past or all present. Going from past to future is very confusing.

Experience can't be shorter--companies have "less" experience.

the phrase is "wishful thinking".

I think you should mention what kind of relevant facts would suppor the argument.

Hi Mamachi,

Thanks a lot for your feedback. It is very useful. I will review and improve my writing.

Cheers

I think you just created a new and pretty awesome nickname for me.

Hi Machichi,

Sorry... for my giving you a nickname

Have a good day.

Hanh

“The Cumquat Café began advertising on our local radio station this year and was delighted to see its business
increase by 10 percent over last year’s totals. Their success shows you how you can use radio advertising to make
your business more profitable.”




The argument states that cumquat cafe was able to increase its business by advertising in the local radio station.stated this way , the argument is based on questionable assumptions.The argument fails to provide clear evidences and supporting facts to substantiate the claim .Hence the argument is unconvincing and deeply flawed.

Firstly, the argument mentions that the cafe started advertising in the local radio station , leading to increase in its business.The argument is making an assumption that radio is popular amongst the locals and that people do listen to radio.more over the argument also assumes that people make purchase decisions based on advertisement in radio.This is not substantiated by any data.It is also possible that the cafe is frequented motly by the teens and that teens do not tune into radio at all.In such a case the Argument will be considerably weakened.Hence , we need proper evidence to substantiate the claim laid in the argument.

Secondly the argument states that the advertisement in radio lead to a 10 percent increase in the business.We have been provided no evidences on the same.It is possible that the business normally experiences a growth of 10 percent year on year and that advertisement in radio has not affected the revenue in any way.We also dont know what other modes of advertising has been undertaken by the cafe .If there are more than one medium in which the cafe has started to advertise such as news paper, ads in local entertainment channels, then it will not be possible to ascertain the entire increase in revenue to radio.Hence the argument would have been strengthened if more data would have been provided to prevent the alternate reasoning.

Finally the arguments is making a recommendation on using the radio advertising to make busineess protitable.This is indeed a very general claim and the argument fails to take the cost benefit analysis into consideration.We do not know how much advertising cost in the radio and t he corresponding increase in revenue its likely to bring.without such a analysis busineesses may actually make a loss.hence the argument will fall apart.

The argument is flawed and based on questionable assumptions and could have been further strengthened if evidences would have been given to substantiate the claims.

First up, there were a few errors in spelling that could have been avoided, as well as commas that were spaced wrong and fullstops, with no gap and no capital letter in the beginning of the sentence (see underlined in above quotation). Also evidence is a singular plural, there is no such thing as evidences.

Based on a brief reading, I would probably give this a 3. I think your points slightly miss the point of the text. I believe, based on the sentence given there were two major issues with the statement.

Firstly, there is no evidence given that the increase in profits were the result of radio advertising, the results could have been due to a strong economy, or a season of excellent weather which encouraged people to go to cafes.

Secondly, the claim that radio advertising can bring success to "your business" makes the assumption that radio advertising is equally useful for all types of business, which is a completely unsupported and generalised argument.

Thanx a lot for the review .will certainly try to improve.

I have made another attempt.Please have a look.


“According to the most recent survey of our readers, nearly 70% of the respondents indicated that they are planning to build or purchase a new home over the next 2 years. These results indicate that the growth in the construction industry is likely to accelerate in the near future. Therefore, this industry continues to offer lucrative opportunities for investment.”

The Argument claims that the construction industry will continue to offer lucrative opportunities for investment in the near future based on a survey conducted by the magazine of its readers.Stated this way the argument is flawed and based on questionable assumptions.The argument is unconvincing and hence flawed.

The Argument is based on the assumption that the result of the survey is reflective of the trend in the construction industry as a whole.However, the survey has been conducted by the magazine of its readers.It is very likely that the people who are the buyers of the magazine are very likely to purchase house in the coming years.Hence the survey is a biased one.The optimism of the respondents may also be based on a recent improvements in the economic data, but that may be a seasonal factor and the optimism may soon decrease with sluggish Economic Data.Thus the argument then will fall apart.

The argument as published in the magazine might also be a paid survey.The builders may have vested interest in advertising about the good health of the construction industry.such paid survey are a very common thing in construction industry.Unless we know how diverse has been the group of people who has been surveyed, it will be difficult to substantiate the argument.

Finally the argument also fails to make a distinction between the types of home i.e luxurious or affordable under consideration.what applies to one kind of housing may not apply to the industry as a whole.In fact luxurious homes at times are recession proof and hence if the respondents surveyed are planning to buy these recession proof homes, the argument will be weakened.The argument could have been considerably strengthened if we would have more relevant data to analyse.

In summary,the argument is flawed and unconvincing.We need more evidence to ascertain the true facts of the argument.

Hi again, got a bit bored of my quan practice so I had a read through. Argument wise this one is much better than your first. Despite a few grammar errors, your points were easy to understand and you came across as understanding the key issues of the argument very well. I got the feeling from reading this that you have a good grasp of business/economics which strengthened your points. I would give this a 4, if you can tidy up the spaces/full-stops and capitalisation I would probably give it a five and if your grammar was perfect I would give it a six. Given that you aren't a native speaker, I think you are doing really well. Just make sure you get the spacing between words correct (I've underlined a few of the mistakes you made with full-stops above). I also added (and highlighted) a few bits that I think could have been worded better. I hope this helps.

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-"



Thanks!

I like this -- probably in a 5.0 range. Just be cautious about the run-on sentences (particularly in that introductory paragraph.)

Not a problem --- I'd say that you've 'checked' your AWA prep box at this point and move on to bigger and brighter things.
Good luck!
-Brian

Hi guys,

I hope you can help me clarify meaning an strucuture of the argument.

A couple of questions:

In the GMAT orginal argument how can I identify assumptions and conclusions?

What is the common sutructure of GMAT argument(assumptions and conclusion) or can the argument include some other parts?


Kind regards,
Nikolay

The argument consists of premises and conclusion. The assumptions will not be given in the argument, that we need to find from our own thought process. And in fact these assumptions are the unstated premise which author assumes to support his conclusion.

As far as understanding and finding the premises and conclusion, look for the keywords or markers such as therefore, thus, hence, so, suggest that, shows that, and proves that etc etc.

The piece of evidence which support these conclusions are called premises. The premises may be stated in the beginning of the argument or at the end. This we can find using the keywords or markers such as for example, in view of, for, for example, and in addition etc.




The argument sometime also can have sub conclusion based the complexity of the argument.

To know more, please go through these articles

1. E-GMAT article list.

2. CR for beginners.


Hope it helps