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."
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The argument avers that Olympic Foods will be soon celebrating its 2th birthday, and the people at Olympic foods can be hopeful that their years of experience will enable them to cut down costs and consequently increase profits. To support this assertion, the speaker quotes the example of color film processing industry as an analogy, in which the cost of film processing fell by a wide margin over a period of 14 years. The argument is full of deficiencies and is open to a lot of questions since it presents meager evidence and dubious assumptions. Neither are the premises convincing nor is the conclusion compelling. The argument is very evidently the upshot of an impetuous generalization.
Firstly, the comparison between a Color Film processing industry and a Food Processing industry is not a very convincing one, because each of these industries are distinct in more than one way. It would be naive to assume, especially owing to lack of concrete data, that what proved to be successful in one industry might be relevant for the other also, or to be more specific, to a particular company. This becomes more important in the light of the fact that there is no reason to believe that even in Color Film Processing industry also, costs came down because of improvements in modus operandi, and not owing to factors as tax-rebate, availability of cheap labor, or reduction in cost of raw materials.
Secondly, while mentioning that Olympic Foods will become a 25 year old organization shortly, the speaker has not provided any concrete data regarding the increase in efficiency of operations in the company, or improvements in the way things are done there. As a result, it's hard to believe that efficiency and cost-reduction will be a concomitant of age in Olympic Foods.
Thirdly, even if it were true that there have been improvements in ways things are done in Olympic Foods, there is no data available about several other factors that may in fact lead to increase in operational costs, or may cause a substantial loss and decrease profits. For example, the cost of raw food materials might increase, supply of specialized labor might dwindle, taxes might increase, leading to erosion of profits.
To buttress this argument, the speaker would do well to provide comparative data related to how Olympic Foods has fared in increasing its efficiency and managing the operations, and how those factors in turn have influenced the bottom-line of the company. In addition to this, the speaker should also mention the contingency measures that are planned to mitigate factors that might impact the profits.
In summary, the argument is the result of a huge speculation in which the speaker has unduly assumed a lot of unsubstantiated evidence. Had the author taken the above mentioned factors into view, the argument would have been rendered incontrovertible. But whatever has been presented here indeed fails to provide a holistic picture to the superfluous claims being made.
"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."
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The argument avers that Olympic Foods will be soon celebrating its 2th birthday, and the people at Olympic foods can be hopeful that their years of experience will enable them to cut down costs and consequently increase profits. To support this assertion, the speaker quotes the example of color film processing industry as an analogy, in which the cost of film processing fell by a wide margin over a period of 14 years. The argument is full of deficiencies and is open to a lot of questions since it presents meager evidence and dubious assumptions. Neither are the premises convincing nor is the conclusion compelling. The argument is very evidently the upshot of an impetuous generalization.
Firstly, the comparison between a Color Film processing industry and a Food Processing industry is not a very convincing one, because each of these industries are distinct in more than one way. It would be naive to assume, especially owing to lack of concrete data, that what proved to be successful in one industry might be relevant for the other also, or to be more specific, to a particular company. This becomes more important in the light of the fact that there is no reason to believe that even in Color Film Processing industry also, costs came down because of improvements in modus operandi, and not owing to factors as tax-rebate, availability of cheap labor, or reduction in cost of raw materials.
Secondly, while mentioning that Olympic Foods will become a 25 year old organization shortly, the speaker has not provided any concrete data regarding the increase in efficiency of operations in the company, or improvements in the way things are done there. As a result, it's hard to believe that efficiency and cost-reduction will be a concomitant of age in Olympic Foods.
Thirdly, even if it were true that there have been improvements in ways things are done in Olympic Foods, there is no data available about several other factors that may in fact lead to increase in operational costs, or may cause a substantial loss and decrease profits. For example, the cost of raw food materials might increase, supply of specialized labor might dwindle, taxes might increase, leading to erosion of profits.
To buttress this argument, the speaker would do well to provide comparative data related to how Olympic Foods has fared in increasing its efficiency and managing the operations, and how those factors in turn have influenced the bottom-line of the company. In addition to this, the speaker should also mention the contingency measures that are planned to mitigate factors that might impact the profits.
In summary, the argument is the result of a huge speculation in which the speaker has unduly assumed a lot of unsubstantiated evidence. Had the author taken the above mentioned factors into view, the argument would have been rendered incontrovertible. But whatever has been presented here indeed fails to provide a holistic picture to the superfluous claims being made.
