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
Please evaluate my essay:
The argument that Olympic Foods will be able to minimize costs as the costs of processing go down over time is not a
reasoned one. The argument assumes that a concept which is applicable for color film processing can also be applied for
food processing without any change. In fact, it assumes that the same principle is applicable for all the types of
organisation.
There could have been a possibility for the cost of raw materials used in color film processing to have been reduced
considerably thereby minimizing the overall cost of processing the color films. However, the same raw materials needn't be
necessarily used in food processing. Thus, the same principle would become inapplicable for food industry. For example,
the automobile industry revolutionised the manufacturing process of cars by switching to automation and robotics from
manual operations. They believed that this move could save more time, improve accuracy, increase productivity and thereby
mimize processing costs for the company. However, when steel, a raw material that is largely used to construct cars,
prices increased over time, the overall processing costs also increased. Therefore, its not necessary for a company to
minimize processing costs just by making a move towards efficent processing techniques.
The argument does not cite the fact that even the cost of labour tends to increase over time. It could be that the labor
wages of employees in food processing industry is higher than the labor wages of the employees in the color film
processing industry. Thus the overall costs needn't necessarily be reduced in food processing just like how it reduced in
color film processing.
Thus as the argument does not consider the variations in raw materials used by different processing industries and the
labor differences in the two industries, the argument does not strongly justify that the Olympic Foods will soon be able
minimize their costs and maximize their profits.
