04.18

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.

Citing facts drawn from the color-film processing industry that indicate a downward trend in the

costs of film processing over a 24-year period, the author argues that Olympic Foods will likewise

be able to minimize costs and thus maximize profits in the future. In support of this conclusion

the author cites the general principle that “as organizations learn how to do things better, they

become more efficient.” This principle, coupled with the fact that Olympic Foods has had 25 years

of experience in the food processing industry leads to the author’s rosy prediction. This argument

is unconvincing because it suffers from two critical flaws.

First, the author’s forecast of minimal costs and maximum profits rests on the gratuitous

assumption that Olympic Foods’ “long experience” has taught it how to do things better. There is,

however, no guarantee that this is the case. Nor does the author cite any evidence to support this

assumption. Just as likely, Olympic Foods has learned nothing from its 25 years in the

food-processing business. Lacking this assumption, the expectation of increased efficiency is

entirely unfounded.

Second, it is highly doubtful that the facts drawn from the color-film processing industry are

applicable to the food processing industry. Differences between the two industries clearly

outweigh the similarities, thus making the analogy highly less than valid. For example, problems of

spoilage, contamination, and timely transportation all affect the food industry but are virtually

absent in the film-processing industry. Problems such as these might present insurmountable

obstacles that prevent lowering food-processing costs in the future.

As it stands the author’s argument is not compelling. To strengthen the conclusion that Olympic

Foods will enjoy minimal costs and maximum profits in the future, the author would have to

provide evidence that the company has learned how to do things better as a result of its 25 years

4 AWA

by Gemj

of experience. Supporting examples drawn from industries more similar to the food-processing

industry would further substantiate the author’s view.