The following appeared as part of an annual report sent to stockholders by Olymp ic 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 appl ies to the processing of food. And since Olympic Foods will soon celebrate its 25th birthday, we can expect that ou r long experience will enable us to minimize costs and thus maximize profits. Discuss how well reasoned . . . etc. The argument states that after a due course of time, organisations become more e fficient in their operations and that results in decreased costs and higher prof its. The argument mentions an example of color film processing and establishes a n analogy between it and food processing. But stated this way the example in the argument fails the generate the anology that experience is directly related to efficiency. The paragraph doesnt state the assumption on which the conclusion ha s been based and is thus, rather unconvincing and weak for a number of reasons. Firstly, the argument readily assumes that overtime costs go down because organi sations learn how to do things better. Though it can be assumed that when a busi ness has been operational for a long period of time, the firm tends be better in operating but that may not lead to lowered costs. Costs are highly dependant on the economy, which the firm has no control of. Increases in inflation leading t o rising costs of raw materials, etc. may lead to increase in costs regardless o f how many years the firm has been in business. For example Indian Airlines has been in business for more than half a century. However today it runs into losse s and needs constant government bailouts because its operational costs have incr eased astronomically as it has not been able to increase its tariffs. But there cannot be a doubt on its expertise in the industry. If the argument had rather e xplicitly stated the assumption of no major changes in the economy, the argument would have been stronger. Secondly, the stated anology between print and food is not very convincing. The argument states that similar principles apply to both color film processing and food processing without mentioning any other details. The argument does not stat e what factors lead to the reduction in prices of print and whether those factor s would influence food processing by any means. Moreover, there is a very high p ossibility that such factors might not be even related to food processing. So it would be somewhat unrealistic to assume so. Thirdly, and most importantly, learning how to do things better may or may not e nable an organization to reduce costs. It will be more realistic to say that the orgnisation might be able to improve its service quality and improve turnaround times with experience. That could translate into higher profits. Thus, if the a rgument had stated so, it would have been more convincing. It can be concluded that the argument is flawed for the above mentioned reasons and could have been more convincing if the author had stated the contributing fa ctors and explicity mentioned the underlying assumptions.