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Please review GMAT AWA( Olympic Foods)

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PratikshaSuresh Newbie | Next Rank: 10 Posts
Joined
18 Aug 2016
Posted:
2 messages

Please review GMAT AWA( Olympic Foods)

Post Thu Sep 29, 2016 7:31 am
Elapsed Time: 00:00
  • Lap #[LAPCOUNT] ([LAPTIME])
    TopicThe 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 uses the correlation between the age of a firm and its efficiency to conclude that Olympic Foods, a frozen food processing organisation, will minimize its costs and maximize its profits because it has a long experience of 25 years in the food processing industry. This argument is weak because it uses a weak analogy and doesnt not provide enough evidence to strongly support its conclusion.
    Firstly, the argument takes an example from the past to support a prediction about the future. The example cited is a color film processing organisation from the 1970s. The argument states that the organisation managed to increase its efficiency to provide services during the span of 14 years from 1970 to 1984. In comparing the Olympic Foods of 2016 to a color film processing firm from 1970s the argument assumes that very little has changed in the span of 40 years. Even if the color film processing firm was an organisation just as old as Olympic Foods, the argument could be refuted on the grounds that food processing and color film processing are two different industries with very different operational processes, expenditures and scale of operation. Hence, implying that Olympic Foods is analogous to a color film processing organisation weakens the argument. Had the argument cited examples of food processing organisations , similar in size , scale of operation and age, to Olympic Foods , the argument would have been strengthened.
    Secondly, the argument lacks proper analysis of the operational and production costs of Olympic Foods, as well as the profits it is currently earning and is projected to earn in the future. There are no facts and figures about scale of operation, size of the industry and types of operations mentioned in the argument to support the prediction. Further, the argument has no mention of what methods the organisation is employing to increase its efficiency and profits. Without these facts and figures, the argument will not drive a strong point to the stockholders.
    In conclusion, the argument is weak because it gives a weak analogy between two different industries from two different time periods, and doesn't include a proper analysis of the industry and practices that would maximize its profits while minimizing costs. It could be strengthened by comparing related organisations operating within the same time span and by providing details about the industry and what methods would be used increase its efficiency and profits.

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