Hello,
I have just started on my GMAT journey and uploading my first AWA.
Could you look and grade it while giving some feedbacks?
Thank you for all your help.
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.
The statement that Olympic Foods will minimize cost and maximize profits based on the color film processing cost reduction is insufficient. It is making an assumption that the cost reduction for the color film processing and the cost reduction for food processing are similar. The conclusion that with the long experience costs will be minimized and profits maximized is flawed with the current premise.
The food processing and color film processing are two different areas. It maybe that the color film processing cost have gone down but the same may not be true for food processing. It can be that on the other hand the food processing cost has gone up as the recipes have become more complex and requires more time and money. The complete opposite can be true that as time went on the food processing cost have actually gone up. In this case the cost will not be minimized and the profits can not be maximized.
If there were supporting documents that the color film processing is a proper representation of all processing cost including food processing the statement can be strengthened. Then it can be proven that cost has gone down but that will still not be sufficient as the color film processing is using the dates of 1970 to 1984 and no time is given for Olympic Foods.
Profit is the difference between the revenue and cost. Even if the cost was reduced, it may be the case that revenue was reduced as well. In this case the profit is not maximized. The price may be reduced due to severe competition or a bad economy. There is not sufficient evidence to bolster the claim made by the Olympic Foods.
The statement is not convincing with the current evidence provided. It can be easily broken down to find the flaws. In order for the statement to be persuasive, more relevant and current evidences needed to be provided along with the statement.