"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 claims that the costs of processing go down over time as organizations learn how to do things better. It then concludes that Olympic Foods will experience the same trend of minimized costs and maximized profits as the organization turns 25 years old soon. There are several key factors that are missing from the argument, on the basis of which it can be evaluated. There are several assumptions that provide basis for the argument, none of which are clearly supported by evidence. Thus, the argument is rather weak, unconvincing, and flawed.
First, the argument claims that the costs of processing goes down over time due to the fact that organizations learn how to do things better. It states that this in turn makes the organization more efficient. However, this proves an ill-defined cause and effect relationship between the age of an organization and lower costs. The argument fails to recognize several factors in the economy that can be attributed to lower costs. For example, a fall in processing costs can be a fall in demand or a rise in supply of raw materials. It is also true that over time, the processing costs also go up. For instance, the price of mining oil has become more expensive as the supply of oil fields are declining. The argument would have been much more convincing if it provided evidence for a clear causal relationship between the age of an organization and the fall in processing costs.
Second, the argument readily assumes that color film processing and food processing are subject to the same operational principles. This is a very weak and unsupported claim without any clear evidence. There are no parallels drawn to suggest that the two industries are similar. Furthermore, the argument suggests that minimizing costs leads to maximization of profits. There are several counter-examples to negate this claim. For example, no matter that reduction in costs, a fall in sales will cause a fall in profits. Since the argument does not convincingly justify these relationships, the argument and its conclusion have no legs to stand on.
In conclusion, the argument fails to provide evidence to suggest that the age of the organization leads to improved operations which then lower costs. In addition, it fails to draw clear parallels between the color film and food industries, while failing to justify the correlation between costs and profits. For these reasons, the conclusion is unconvincing and flawed.
The argument claims that the costs of processing go down over time as organizations learn how to do things better. It then concludes that Olympic Foods will experience the same trend of minimized costs and maximized profits as the organization turns 25 years old soon. There are several key factors that are missing from the argument, on the basis of which it can be evaluated. There are several assumptions that provide basis for the argument, none of which are clearly supported by evidence. Thus, the argument is rather weak, unconvincing, and flawed.
First, the argument claims that the costs of processing goes down over time due to the fact that organizations learn how to do things better. It states that this in turn makes the organization more efficient. However, this proves an ill-defined cause and effect relationship between the age of an organization and lower costs. The argument fails to recognize several factors in the economy that can be attributed to lower costs. For example, a fall in processing costs can be a fall in demand or a rise in supply of raw materials. It is also true that over time, the processing costs also go up. For instance, the price of mining oil has become more expensive as the supply of oil fields are declining. The argument would have been much more convincing if it provided evidence for a clear causal relationship between the age of an organization and the fall in processing costs.
Second, the argument readily assumes that color film processing and food processing are subject to the same operational principles. This is a very weak and unsupported claim without any clear evidence. There are no parallels drawn to suggest that the two industries are similar. Furthermore, the argument suggests that minimizing costs leads to maximization of profits. There are several counter-examples to negate this claim. For example, no matter that reduction in costs, a fall in sales will cause a fall in profits. Since the argument does not convincingly justify these relationships, the argument and its conclusion have no legs to stand on.
In conclusion, the argument fails to provide evidence to suggest that the age of the organization leads to improved operations which then lower costs. In addition, it fails to draw clear parallels between the color film and food industries, while failing to justify the correlation between costs and profits. For these reasons, the conclusion is unconvincing and flawed.
