The argument states that Olympic Foods will minimize its costs and maximize its profits,because of its long experience of 25 years.This conclusion is made on the premise that the cost of processing decreases for organizations with long experience as they learn how to do things better and more efficiently.
Although, there might be situations which may not necessarily apply to this argument.For example,the revenue generated by Olympic foods must outweigh the cost of processing to maximize its profits.Minimizing the processing costs does not necessarily means maximizing the profit .Also ,one must look at the plausibility of gaining long experience.As most companies learns to reduce its processing cost with over time experience,doesn't mean that all companies with long experience will learn to do so.
The first issue to be addressed is that whether the costs of processing for color flim processing justifies for food processing costs or not under different market conditions.As 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,doesn't implies that the cost of food processing will also decrease or increase with the same percentage rate.The market conditions for both the processing may change every year with different scales of variation.A yearly cost benefit analysis has to be made in order to determine the decrease or increase of processing cost according to various market situations.A revenue model will justify the maximizing/minizing profit with increasing/decreasing processing costs.One should properly analyze the revenue model to understand the increased efficiency of the organization.
This argument also relies on the idea that companies with long experience learn to do thing in a better way and more efficiently which minimizes the processing cost and maximizes the profit.But this is not the case always.Competion arises,with new technologies and strategies (seeks the market demands) which outweigh the companies long experience of doing things in a better way.For example ,nokia was left behind by the new android technologies as it could not view the futuristic android world.However nokia launched its own set of technologies with failed to regain its market.
Ultimately one must understand, with experience organizations must develop adaptability with rapid change in market demands .Adaption to newer technologies can make the organizations productivity faster.
In conclusion,at first it may seem fair enough to think that organizations with long experience will learn to do thing better and efficiently which will reduce down the procession cost and maximize the profit but there are other situations as well where this may not fit.Like,the revenue must outweigh the processing cost,competition analysis,yearly revenue model analysis,adaptation to new technologies and new market changes.More over the processing cost for film processing and food processing may not necessarily rise or fall simultaneously with the same rate.One must put all the points forward before analyzing,the efficiency of an organization which will minimize the processing cost and maximize the profit.One should not necessarily expect the Olympics food process to do the former as they 25 years of long experience.
Although, there might be situations which may not necessarily apply to this argument.For example,the revenue generated by Olympic foods must outweigh the cost of processing to maximize its profits.Minimizing the processing costs does not necessarily means maximizing the profit .Also ,one must look at the plausibility of gaining long experience.As most companies learns to reduce its processing cost with over time experience,doesn't mean that all companies with long experience will learn to do so.
The first issue to be addressed is that whether the costs of processing for color flim processing justifies for food processing costs or not under different market conditions.As 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,doesn't implies that the cost of food processing will also decrease or increase with the same percentage rate.The market conditions for both the processing may change every year with different scales of variation.A yearly cost benefit analysis has to be made in order to determine the decrease or increase of processing cost according to various market situations.A revenue model will justify the maximizing/minizing profit with increasing/decreasing processing costs.One should properly analyze the revenue model to understand the increased efficiency of the organization.
This argument also relies on the idea that companies with long experience learn to do thing in a better way and more efficiently which minimizes the processing cost and maximizes the profit.But this is not the case always.Competion arises,with new technologies and strategies (seeks the market demands) which outweigh the companies long experience of doing things in a better way.For example ,nokia was left behind by the new android technologies as it could not view the futuristic android world.However nokia launched its own set of technologies with failed to regain its market.
Ultimately one must understand, with experience organizations must develop adaptability with rapid change in market demands .Adaption to newer technologies can make the organizations productivity faster.
In conclusion,at first it may seem fair enough to think that organizations with long experience will learn to do thing better and efficiently which will reduce down the procession cost and maximize the profit but there are other situations as well where this may not fit.Like,the revenue must outweigh the processing cost,competition analysis,yearly revenue model analysis,adaptation to new technologies and new market changes.More over the processing cost for film processing and food processing may not necessarily rise or fall simultaneously with the same rate.One must put all the points forward before analyzing,the efficiency of an organization which will minimize the processing cost and maximize the profit.One should not necessarily expect the Olympics food process to do the former as they 25 years of long experience.
