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Learn what truly sets the UC Riverside MBA apart and how it helps in your professional growth
22 Jun 2015, 22:12
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==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.”
Discuss how well reasoned . . . etc.
=Question==
==My answer==
The argument are poorly reasoned. The line of reasoning are not well established, and the use of evidence are not justified.
It mentioned that the lowered processing costs would eventually bring higher profit, which should be challenged. It is possible to lower the cost by different measures, such as lowering the wages or purchasing the compromised material. These mentioned measures are completed unrelated to the learning of the organization. At this point, the lowered cost may not be due to learning how to do things better or more efficiently.
The argument has compared frozen food production with color film processing, which is not a reasonable comparison, since the market nature are completely different. Therefore, the principle which applied to color film processing may not be applied to frozen food production.
It tried to link the long experience and the 25th birthday of the company with minimized cost and maximized profits. However, a long established company may not always make more profit in the market. On the contrary, it is possible that the long experience made the company become more conservative, thus being weaker in adapting the change of the market. The birthday of a company is also completely unrelated to the profit and cost of a company.
Besides, the argument did not consider the scenario of the competitors of Olympic Foods. Even if the processing costs of Olympic Foods are lowered because of the learning of the organization, it is possible that their competitors have also learnt, and thus have their processing costs lowered. Showing no information of the competitors, it does not make sense to expect an increasing profit solely because of lowered costs.
In order to make the argument more persuasive, firstly, the argument should explain further about the reasons of lowered processing cost. Secondly, the comparison between food production and color film processing should be replaced. Besides, the company should also explain further how their experience can help the company in terms of increasing the profit or lowering the cost. Last but not least, the argument should include some information of the competitors, and how Olympic Foods has performed better.
==My answer==
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.
=Question==
==My answer==
The argument are poorly reasoned. The line of reasoning are not well established, and the use of evidence are not justified.
It mentioned that the lowered processing costs would eventually bring higher profit, which should be challenged. It is possible to lower the cost by different measures, such as lowering the wages or purchasing the compromised material. These mentioned measures are completed unrelated to the learning of the organization. At this point, the lowered cost may not be due to learning how to do things better or more efficiently.
The argument has compared frozen food production with color film processing, which is not a reasonable comparison, since the market nature are completely different. Therefore, the principle which applied to color film processing may not be applied to frozen food production.
It tried to link the long experience and the 25th birthday of the company with minimized cost and maximized profits. However, a long established company may not always make more profit in the market. On the contrary, it is possible that the long experience made the company become more conservative, thus being weaker in adapting the change of the market. The birthday of a company is also completely unrelated to the profit and cost of a company.
Besides, the argument did not consider the scenario of the competitors of Olympic Foods. Even if the processing costs of Olympic Foods are lowered because of the learning of the organization, it is possible that their competitors have also learnt, and thus have their processing costs lowered. Showing no information of the competitors, it does not make sense to expect an increasing profit solely because of lowered costs.
In order to make the argument more persuasive, firstly, the argument should explain further about the reasons of lowered processing cost. Secondly, the comparison between food production and color film processing should be replaced. Besides, the company should also explain further how their experience can help the company in terms of increasing the profit or lowering the cost. Last but not least, the argument should include some information of the competitors, and how Olympic Foods has performed better.
==My answer==
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