GMAT Essays (AWA)

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 . . . etc.

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In the above argument, the author averts that efficiency of a company increases with experience. The author supports his claim with the example of price drop of 3-by-5-inch print. The author assumes that the same principle applies to the Food processing Industry and the company can make great profits on applying these principle in the food processing business. The argument is completely flawed as the author does not provide any substantial evidence to claim that the principle, which worked for Color Film Processing industry would also work for Food processing industry.

Firstly, the argument asserts that efficiency through experience made Color Film Processing industry to reduce the price of 3-by-5 inch print. The author ignores the other factors which can affect the price of the print, for example, the price of paper, the labor cost etc

Secondly, the author wrongly compares two different industries. The author assumes that the principle that worked for Color Film processing industry would also work for Food processing industry. In Food Processing Industry, more emphasis is on the quality of the food, longevity of the processed food etc and Color Film Processing emphasis more on quality of the picture quality, resolution etc. Also, the author did not give any evidence to make his claim substantial.

The author should have taken into consideration more reasons behind the price drop of 3-by-5 print as that would have made the argument more stronger. Innovation, reduction in the cost of packaging of processing food etc can also help in increasing the efficiency and increasing the profits., which the author failed to consider.

In sum, the argument does not give any strong proof to make claims of the author substantial. The author assumes that only through experience can efficiency and profits can be earned, which backfires the credibility of the argument as the author ignores the other factors. More elaborated description of the plan would have helped the author to make the argument substantial.