GMAT Essays (AWA)

Topic:
"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 topic is the first topic in the OG Guide

Response:
The argument that Olympic Foods processing costs will go down and they will maximize profits is inconclusive based on the information provided in the argument. The argument rests on the assumption that organizations learn how to do processing better with time, and as a result they become more efficient.

In the case of color film processing the decrease in cost due to efficiency could be due to significant technological advantages that made the process more efficient and not the amount of time that they had dedicated to perfecting their product. Likewise, it could have been that the film processing material cost less make in 1970 than they did in 1984. In addition, they could have had more employees that worked to make the finished product, thus combined would result in a lower price and a quicker service time.

Therefore, in the case of Olympic Foods a longer time in business does not necessarily mean that they will minimize their costs and maximize there profits. These outcomes will depend on whether a number of factors that the argument does not give the information to in order to determine the outcome.