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.”
Discuss how well reasoned . . . etc.
This passage shown in the annual report of Olympic Foods company is trying to assure the stockholders that the company can reduce their costs and accordingly maximize their profits. It is reasonable for any company to demonstrate their continue improvements in cost saving and to allege their profitability, but, unfortunately, there are several conspicuous logic fallacies in the reasoning development.
It is true that during last decade many booming industrals have advanced the effeciency and polished of their operation by adopting new management concpet, reequipping their facility, and improving their manufacture process. However, it is specious to say the cost will necessarily drop because the company increase the effeciency or know the proecess better. Since almost every improvement requires investment and without any guarantee that every improvement will automaticly lead to cost reduce, because the big tradeoff factor exists, on the account of the input-output ratio and potential risk. So before the trade-off factor become identified, saying that cost would drop could be too hasty.
In addition, the author is make a false analogy between food company and color film company. Every industral has different operation model, especially for the food company. The top cost contributor from food company is quality assurance, because the food safety, the fundamental quality metric, is significantly vital to customer, and the quality cost can not be save at any time. The color film company is a totally different type, the prime costs are coming from the supply-chain, from which the raw material was purchased and to which the finish good was sold, such as lead time, inventory management an so on. Thereore, it is very dangerous for the author to draw conclusion from this absurd analogy.
Moreover, the argument draw conclusion base on their long experience, But it seems that this reasoning line is problemic. Time is shifting, old experience may not be suit of the current condition anymore. For example, people now are increasely taking healthy criteria into consideration for the food selection, in this way, the food company whose major products are coffeine or artifical butter related would eventually get loss, if they exclusively rely on their past experiences to maximize their yields through costs saving.
The most important, there is not any causal relationship between the birthday celebration of the company and it’s profits or cost saving. Although company could do some marketing promotions, such as special offer or discount, but those activities do not shed any lights on it’s profits, for the point that the extra advertisement costs are bound to exceed the normal case, and that profit margins are narrowed. Thus, if no evidence about supplus between the total cost, including product and marketing, and revenue, it is no safety to say the goal to minimize it’s costs and thus to maximize it’s profits would achieve.
Therefore, given above logical reasoning gaps or fallacy are presented, this conclusion for the company would be profitable is not valid to be draw, and stockholders would be more cautious to this over optimistic opinion. 作者: teddybearj4 时间: 2012-6-2 08:29
太水想拍拍不了，顶一下！~~~作者: Suri在奋斗 时间: 2012-6-2 15:58
Moreover, the argument draw conclusion base ontheir long experience based on
Time is shifting, and old experience may not be suit of the current condition anymore
the food company whose major products are coffeine or artifical butter relatedwould eventually get loss, are related to coffeine or artificial butter 有一些很小的语法错误 (*^__^*) 嘻嘻…… 总体写的很好哇作者: yakev6 时间: 2012-6-3 11:21
谢谢suri，嗯嗯改过来了，总是会莫名其妙的犯些语法错误。。。多谢啦作者: liulu007 时间: 2012-6-3 22:43
我是坐板凳来学习滴。。。。作者: 秋晨小仔 时间: 2012-6-15 02:44
我班门弄斧。。。给大哥点我的愚见。。。求讨论。。。大哥有错一定要给我说啊！！！[attach]102335[/attach]作者: yakev6 时间: 2012-6-15 08:50
秋晨秋晨，多谢指点，我觉得说的非常好非常好。我准备下周开始集中突破作文，到时候要和秋晨多学习呢，多谢哦！作者: 秋晨小仔 时间: 2012-6-15 15:06
