Question :
The following appeared as part of an annual report sent to stakeholders by Olympic foods, a processor of frozen food:
'Over time, the cost of processing go down because as organization 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 per five day service in 1970 to 20 -cents per 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 cost and thus maximize profit '
The argument that as organizations learn how to do things better and become more efficient leads to reduction in the cost of processing of Olympic food does not take into account some other facts that need to be considered to validate the argument . Also, the statement that follows the argument actually contradict the concluding part of the of the writers main argument. Furthermore, the writer does not state the reason for the reduction in processing cost other than when organization learn how to do things better. The writer does not address other factors that may leads to reduction in processing price. What if not the efficiency that leads to reduction in cost? First, it may be that cost of raw materials or shipping involved, the cost of labor , taxes charged by the government, has gone down, or maybe the organization found a cheaper supplier of the raw materials. All these have a significant effect on the cost of a product or services.
First, the writer cited an example that the cost of 3 by 5 inch print fell from 50 cents per 5 day service to 20 cent per one day service within a 14 year period. This is not a reduction in price in any form. If over a 14 year period what is being sold as 10 cent per day is now 20 cent /day constitutes nothing more to lack of efficiency. Anyone would have hoped that in this scenario, the cost should have gone down tremendously over a 14 year period. However, the 20 cent /per day may actually be reduction in the process if the quality of the service produced in 1970 is nothing to be compared with the service offered in 1984. Maybe, in 1970, there is nothing like warranty, after sales services. Offering all these in 1984 may be enough to justify those 20 cents per day is a reduction in service price
Similar idea goes with the cost of food processing. The cost of food processing may go down not necessarily because Olympics improve their services; it may be that the raw materials used in processing this food become more available in the market at a cheaper rate. Also, the writer failed to clarify what kind of food being discussed. Is it food that the raw materials are locally grown or the ones that are imported? If the raw materials are locally grown, it may be that there is a climate change that favors locally grown food. As a result, the cost may go down. Also, if it imported food, it may be that transportation cost, taxes and other overhead cost went down. Thus there may be a reduction in the processing cost.
Because the argument leaves out major key factors, it's not convincing enough to support the conclusion. If the write had included all the above mentioned point, the argument would have been more meaningful
The following appeared as part of an annual report sent to stakeholders by Olympic foods, a processor of frozen food:
'Over time, the cost of processing go down because as organization 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 per five day service in 1970 to 20 -cents per 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 cost and thus maximize profit '
The argument that as organizations learn how to do things better and become more efficient leads to reduction in the cost of processing of Olympic food does not take into account some other facts that need to be considered to validate the argument . Also, the statement that follows the argument actually contradict the concluding part of the of the writers main argument. Furthermore, the writer does not state the reason for the reduction in processing cost other than when organization learn how to do things better. The writer does not address other factors that may leads to reduction in processing price. What if not the efficiency that leads to reduction in cost? First, it may be that cost of raw materials or shipping involved, the cost of labor , taxes charged by the government, has gone down, or maybe the organization found a cheaper supplier of the raw materials. All these have a significant effect on the cost of a product or services.
First, the writer cited an example that the cost of 3 by 5 inch print fell from 50 cents per 5 day service to 20 cent per one day service within a 14 year period. This is not a reduction in price in any form. If over a 14 year period what is being sold as 10 cent per day is now 20 cent /day constitutes nothing more to lack of efficiency. Anyone would have hoped that in this scenario, the cost should have gone down tremendously over a 14 year period. However, the 20 cent /per day may actually be reduction in the process if the quality of the service produced in 1970 is nothing to be compared with the service offered in 1984. Maybe, in 1970, there is nothing like warranty, after sales services. Offering all these in 1984 may be enough to justify those 20 cents per day is a reduction in service price
Similar idea goes with the cost of food processing. The cost of food processing may go down not necessarily because Olympics improve their services; it may be that the raw materials used in processing this food become more available in the market at a cheaper rate. Also, the writer failed to clarify what kind of food being discussed. Is it food that the raw materials are locally grown or the ones that are imported? If the raw materials are locally grown, it may be that there is a climate change that favors locally grown food. As a result, the cost may go down. Also, if it imported food, it may be that transportation cost, taxes and other overhead cost went down. Thus there may be a reduction in the processing cost.
Because the argument leaves out major key factors, it's not convincing enough to support the conclusion. If the write had included all the above mentioned point, the argument would have been more meaningful
