The following appeared as part of an annual report sent to stockholder 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 thereby maximize profits in the future. In support of this conclusion the
author refers to 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 decades of
experience in the food processing industry creates author’s optimistic prediction. However, this
argument is unconvincing because it suffers from two critical flaws.
First, the author’s prediction of minimal costs and maximum profits rests on the dubitable
assumption that Olympic Foods’ experience has improved its production and logistical methodology.
There is no guarantee that this is the case. Nor does the author cite any evidence to support this
assumption. It is equally probable that Olympic Foods has learned nothing from its 25 years in the
food‐processing business. Without this arbitrary assumption, the expectation of increased efficiency
has no basis.Second, it is highly doubtful that the facts drawn from the color‐film processing industry are
applicable to the food processing industry. There are many differences between the two industries,
making the analogy less than valid. For example, problems of hygiene, contamination, and
transportation all affect the food industry but are not significant factors 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 or reliable. To strengthen the conclusion that
Olympic Foods will enjoy minimal costs and maximum profits in the future, the author must provide
evidence that the company has learned how to do things better as a result of its lengthy industrial
experience. Supporting examples drawn from industries more similar to the food‐processing
industry would further support the author’s view.