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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.”
Citing facts drawn from the color-film processing industry that indicate a downward trend in costs over a 24-year period, the author asserts that the Olympic Foods will likewise be able to minimize costs and thus maximize profits in the future. In support of this allegation, the author adopts the general principle that “ as organizations learn how to do things better, they become more efficient”. This principle, coupled with the fact that Olympic Food has had 25 years of experience in the food precessing industry leads to the author’s rosy prediction. This conclusion, however, exiting two fatal flaws, is unconvincing.
First of all, despite of an advent of cost-saving process arising in color-film industry from 1970 to 1987, no guarantees that the 25-year operating experience of Olympic Foods will result in “doing things better”, thus leading to efficiency are offered by the author. To the contrary, Olympic Foods might suffer from a low productivity due to its constant model of production without any slight innovations. Hence, in order to support his assumption of “long experience” equivalent to efficiency, the author ought to offer much more evidences.
Second, it is highly doubtful that the facts drawn from the color-film processing industry is applicable to the food-processing industry. Though some similar procedures do exist between the two industries, problems such as contamination, spoilage, timely transportation and the like virtually only can be found in latter one. Problems, as given above, would present insurmountable obstacles that prevent Olympic Food from lowing costs in the future, if no measures were taken.
As it stands the author’s argument is not compelling. To strengthen the conclusion that Olympic Food will enjoy minimal costs and maximum profits in the future, the author would have to provide convincing proofs that the company will do things better of a result of it 25-year operating experience and gain high efficiency consequently. Furthermore, supporting examples drawn from industries more similar to the food-processing industry would further substantiate the author’s view.
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发表于 2011-7-1 23:31:37
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发表于 2011-7-6 17:46:16
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