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Please, rate and provide feedbacks on my first AWA attempt.

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akashjan10 Newbie | Next Rank: 10 Posts Default Avatar
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28 Aug 2017
Posted:
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Please, rate and provide feedbacks on my first AWA attempt.

Post Mon Aug 28, 2017 5:57 am
Question:

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 you find this argument. In your discussion be sure to analyze the line of reasoning and the use of evidence in the argument. For example, you may need to consider what questionable assumptions underlie the thinking and what alternative explanations or counter examples might weaken the conclusion. You can also discuss what sort of evidence would strengthen or refute the argument, what changes in the argument would make it more logically sound, and what, if anything, would help you better evaluate its conclusion.

AWA essay:

The argument claims that the cost of processing decreases with time as organizations learn how to do things better because the cost of a 3-by-5 inch print fell from 50 cents for five day service to 20 cents for one day service in around 15 years. Hence, the same principle would apply to food processing and Olympic Foods will also minimize costs and maximize profits since it is celebrating its 25th birthday soon. Stated in this way, the argument fails to mention several key factors, on the basis of which it could be evaluated. The conclusion of the argument relies on assumptions, for which there is no clear evidence. Therefore, the argument is rather weak, unconvincing and has several flaws.

First, the argument readily assumes that costs of processing goes down as organizations learn to do things more efficiently. This statement is a stretch and not substantiated in any way. There are numerous examples in other industries, where 20-30 year old organizations have been unsuccessful in bringing processing costs down. For instance, Johnson and Johnson, a well known market leader in Cosmetic industry since 25 years, has implemented numerous modern operational changes to reduce operational and product processing costs. Yet company's business reports over the years suggest that Johnson and Johnson's long experience in the industry did not enable them to minimize costs. Another example is Parle, an Indian foods and beverages firm started in 1929. Although, Parle is highly focused on efficiency and uses most productive processing techniques in the market, it has failed to reduce its overall processing costs in 100 years. It follows that it is not obvious that organization's experience and learning will cause reduction in its cost of processing. The argument would have been much clearer if it explicitly gave examples of how market experience and learning would guarantee decrease in costs and increase in profits.

In addition, the argument assumes that since film processing industry witnessed processing cost declines, food industry would observe similar reductions. This is again a very weak and unsupported claim as the argument does not demonstrate any correlation between film processing and food processing industries. In fact the argument does even draw a valid parallel between the mentioned film processing industry and its 3-by-5 inch print processing costs. If any correlation had been shown between the industries, the author would have sounded a bit more convincing. Further, if the argument provided evidence that high experience and learning results in reduction of processing costs and increase in profits, the argument could have been strengthened further.

Finally, the argument concludes that we can expect Olympic foods, a 25 year old firm, to see a cost minimization and profit maximization. From this statement again, it is not clear how a firm which is celebrating its 25th birthday will be able to see the same cost reduction that Film processing company witnessed. Without supporting evidences and examples from other businesses where time determined company's cost reduction, one is left with an impression that the claim is more of a wishful thinking rather than substantive evidence. As a result, the conclusion has no legs to stand on.

In summary, the argument has flaws and therefore unconvincing. It could be considerably strengthened if the author clearly mentioned all the relevant facts. In order to assess the merits of a certain situation, it is essential to have full knowledge of contributing factors.

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