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An annual report sent to shareholders by Olympic Foods points out that the Olympic Food will minimize its costs and maximize its profits on account of its long experience. To illustrate this fact, the author presents us an example of color filming processing. However, several fallacies deserve our attention.
First of all, the author assumes that the only way to influence the cost is how the company to do things. It is too oversimplified. In this internationalized world, many other things will affect the costs including the wages of labors, the price of food, the economic stasis of the country and the transportation fees. To take an example, if Philippines refused to export its banana to our country, the cost of food containing banana will increase dramatically. Secondly, the article tries to utilize the color film industry to prove the fact right. Nevertheless, it is a false analogy. There are many differences between color film industry and food industry which fail to make comparison between two industries. Film industry is more about technology. The more people who know how to do the film processing, the less money it will cost.
Thirdly, when the author cites the color film processing, he used the example which occurred in 1970 to 1984. We all know that different things will happen in the different times. Because the politics, economics and demographics all differ in different time periods, which will influence the costs enomously.
All in all, it is too harsh to make the conclusion that the costs of processing in Olympic Food will go down only because the organization learn how to do things better and more sufficient. In my point of view, in order to illustrate their conclusion, it is better to show us the cash flow and explain it in statistics. |
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