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The author concludes that with long experience, Olympic Foods will be able to minimize costs and thus maximize profits because the cost of processing has gone down in the color film industry. The line of reasoning is that the same approach in film industry also can be applicable to other industries such as food industries. The argument is not sound, however, because it is not necessary that same thing will happen to food industry. In the following paragraphs, I will illustrate these errors in detail.
Firstly, the argument rests on the assumption that the food industry is analogous to color film industry in all respects. Although there are points of comparison between food industry and color film industry such as that they both involve the processing and the organizations can learn to do things better, there is much dissimilarity as well. For example, the food industry need fast transportation and special storage in order to keep food fresh, and these requirements could never been cut substantially. For color film industry, these costs are probably never taken into consideration. Thus, it is likely much more difficult to cut costs for food industry.
Secondly, the author fails to address other factors that contribute to the success of the company. It is well known that minimized cost will maximize the profit of a company. However, other factors such as sales revenue , technological advances and efficient management approach will also benefit the profit. For example , the market today is really competitive so that if a company sells products at lower price yet at same quality, then it will attract more customers. Thus, even though the Olympic food reduce its cost sharply, it is unlikely to gain more profit.
Finally, the author doesn’t include any information about the quality of long experience. Rather, it just mentions that it has already run business 25 years. While there is correlation between long time experience and the ability to maximize the profit, it is not always the case. If the Olympic food company failed to accumulate valuable experience, the long time experience probably will not help achieve the goal of maximizing the profit.
In sum, the argument is not compelling because it omits some factors that should be taken into consideration in order to make the conclusion proper.
If the author has considered the difference between color film industry and food industry , evidence that the food company has learned to do things better, the argument will be more convincing.
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