AWA – Argument #1
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 twenty-fifth 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 counterexamples 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.
The argument that only long experience can lead to an organization to increase its profits and maximize costs is not entirely based on logical facts. There are many gaps in the argument which needs to be filled up to support the conclusion.
First, the argument fails to mention whether there were any improvements in technology which could have enabled an organization to reduce its operational cost. For eg. modernization and automation could have led color film processing industry to have reduced the man hours hence reducing the capital expenditure. This in turn could have resulted in quicker delivery time and hence increased profits. It is incorrect to assume that food industry is also undergoing the same change.
Secondly, the reduction in cost and maximization of profit could have been a direct outcome of improved people skills and effective training supported by a better work flow management. With time the color film industry might have seen the same workers doing the same work over and over again thereby being able to do the work faster. They may have been skillful enough to devise new ways of achieving the target which could have resulted in reduced processing time. Same cannot be said about Olympic foods or the food industry in general. No new process improvements may have taken place and it is highly possible that the experienced work force have all quit the organization.
Finally, it is possible that the huge rise in use of cameras have resulted in the increase of sales in the film processing industry. People from various age group, of various demography have been able to afford cameras and are hence going for color film development. This may have led to increased profits and reduced cost to the industry in face of the huge demand. Nothing of such has been mentioned about the food industry. Nothing has been mentioned about the volume of sales of Olympic foods increasing in time so as to provide larger profits.
Thus, the argument is not entirely convincing. The evidence presented to support the conclusion does little to prove that time and time alone is the key to maximize profits and minimize costs. Ultimately, the evidence could have been strengthened by making it evident that the food industry has undergone significant modernization, that Olympic food has a wider consumer base and that processes have been improved to maximize productivity as well as profits.
