GMAT Essays (AWA)

Topic:
The following appeared as part of an annual report sent to stochoders 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."

Essay:
The given argument is not appropriately reasoned and up to the mark. There are quite a few questionable assumptions that weaken the argument. The evidence on which the argument is based is not sufficient and it does not present enough information for the reader to evaluate the conclusion.
The first big assumption here is that the 3-by-5-inch print which is used as the underlying example to conclude the argument is an appropriate indicator of the whole color film processing industry. There is no clarification on whether the cost of all other products of the color film processing industry have seen a similar, or at least a significant, price drop. Olympic Foods has also assumed that the price of the color film printing went down because the organizations of that industry learnt to do it in a more efficient way thus reducing the cost. On the contrary, the real reason for the price reduction could be technological advancement, reduction in the demand for 3-by-5-inch prints or any such change in the industry. These assumptions could raise questions in the minds of the company's stockholders and that would weaken the conclusion of the argument made by the company.
The company could make the argument more logically sound by highlighting the similarities in the color film processing industry and the food processing industry and how Olympic Foods will take advantage of those similarities. The company should emphasize on the changes to be implemented in their food processing cycle and how it will do the same so the stockholders get detailed information about the company's future plans. By providing more evidence like the methods they intend to use to bring down the costs it will be able to strengthen it's claim of maximizing profits.
Thus, due to the above-mentioned points, the argument provided by Olympic Foods is not sufficient. There are loopholes which can be filled by presenting more elaborate evidence thus making it airtight.