Hi,
This is my first attempt at AWA, and would request you to review and suggest edits. This was completed in 30 mins.
Also, I believe I need to read a few other responses to various questions, and would be really helpful if you could provide a link to a thread to do so.
Any additional suggestions are welcome.
Thanks!
tt
Question: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.”
My response:The argument that Olympic Foods, because of its long experience, will be able to minimize costs and thus maximize profit is flawed. The argument not only assumes color film processing is a representative example but also makes conclusion for which sufficient proof is not mentioned.
Firstly, the argument readily assumes that what is true of the color film processing, will also hold true for Olympic Foods. The author does not evaluate other factors, which may have led to the decrease in cost for color film processing. The price may have gone down because of technological advancements, reduction in quality, low demand, etc. The author fails to investigate other probable causes, and draws a conclusion based on a generalization that over time, companies learn how to do things better and become more efficient; thereby reducing costs and increasing profits.
Secondly, The author assumes that 25 years is a long enough period for Quality Foods to minimize costs and increasing profits. It could be argued that food industry is characteristically different from other industries, and what could be considered long period in other industry, does not hold true for the food industry. In food industry due to cultural overlaps, new dishes are created frequently, leading to rapid evolution of the industry.
The identified flaws can be removed or the reasoning can be substantiated, if the author is able to provide evidence for the following observations:
1. Are these two industries comparable?
2. Is there a relationship between these two industries?
3. Were there any other factors for the decrease in price for color image processing?
4. Is 25 years a long enough period in food industry?
5. Has Olympic Foods gathered enough experience to minimize costs?
6. Is the profit only dependent on costs, and not on volume?
7. Are there any fixed costs involved?
In conclusion, the argument that Quality Foods due to its 25 years experience can minimize costs and maximize profits is flawed. Without answers to the posed questions, the conclusion seems to be based on flawed assumptions, and it would be unwise to make any decision on the basis of this argument in its current form.