TOPIC: 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 twenty-fifth birthday, we can expect that our long experience will enable us to minimize costs and thus maximize profits."
ANSWER:
The author claims that Olympic Foods, a processor of frozen foods will become more profitable. To support this conclusion, the author states that because organizations learn how to do things better, they become more efficient, so the costs of processing go down. An example of reducing costs in color film processing is mentioned to strengthen the argument. Furthermore, the author expect the company to minimize costs and maximize profits simply because of its long experience. However, the argument is unreasonable in some aspects.
First, the author gives the reason that the costs of processing go down is because the organizations learn to do things better. Here, the author simply ignores many other relevant factors that influence the costs such as machinery, marketing, labor, materials etc. If the company has to apply a new expensive technology in processing foods, the costs may be higher even though the organizations become more efficient. Moreover, if the ingredients are much more expensive than before and the workers demand higher salary, then the costs may be inflated.
Second, it is not quite logical to compare food processing industry with film processing industry. The two industries are so different and influenced by irrelevant factors. The food industry deals with edible products which suffer from easy decay while the film industry deals with inedible products which are more easily maintained. In addition, these industries have target customers with entirely different concerns, apply different technology, and use different sources of labors and materials. Therefore, the decrease in costs in the film processing industry has no value to help determine the costs in food processing industry.
Finally, the author mentions experience as a factor that helps the company minimize the costs and thus maximize the profits. Although it is more advatageous for a company to be experienced in its business, it is oversimplified to jump to the conclusion that just operating for a long time determines the change in costs. As mentioned before, many other relevant factors should be involved when costs are considered.
In conclusion, the author's argument is not well convincing. To make it more persuasive, the author must also consider other factors that influence costs. Moreover, it is also helpful to make clear the relationship between food processing industry and film processing one.
ANSWER:
The author claims that Olympic Foods, a processor of frozen foods will become more profitable. To support this conclusion, the author states that because organizations learn how to do things better, they become more efficient, so the costs of processing go down. An example of reducing costs in color film processing is mentioned to strengthen the argument. Furthermore, the author expect the company to minimize costs and maximize profits simply because of its long experience. However, the argument is unreasonable in some aspects.
First, the author gives the reason that the costs of processing go down is because the organizations learn to do things better. Here, the author simply ignores many other relevant factors that influence the costs such as machinery, marketing, labor, materials etc. If the company has to apply a new expensive technology in processing foods, the costs may be higher even though the organizations become more efficient. Moreover, if the ingredients are much more expensive than before and the workers demand higher salary, then the costs may be inflated.
Second, it is not quite logical to compare food processing industry with film processing industry. The two industries are so different and influenced by irrelevant factors. The food industry deals with edible products which suffer from easy decay while the film industry deals with inedible products which are more easily maintained. In addition, these industries have target customers with entirely different concerns, apply different technology, and use different sources of labors and materials. Therefore, the decrease in costs in the film processing industry has no value to help determine the costs in food processing industry.
Finally, the author mentions experience as a factor that helps the company minimize the costs and thus maximize the profits. Although it is more advatageous for a company to be experienced in its business, it is oversimplified to jump to the conclusion that just operating for a long time determines the change in costs. As mentioned before, many other relevant factors should be involved when costs are considered.
In conclusion, the author's argument is not well convincing. To make it more persuasive, the author must also consider other factors that influence costs. Moreover, it is also helpful to make clear the relationship between food processing industry and film processing one.
