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.”
1. false analogy: The food industry is not analogous to the color film industry.
2.causal oversimplification: Other factors that may contribute t to the cost decline of the printing cost should be considered and ruled out.
3.gratuitous assumption: The conclusion of the argument is based on a gratuitous assumption that the company can minimize cost and maximize profit because the company has been conducted for 25 years.
The author assumes that since organizations engaged in color-film processing were able to increase efficiency and cut-down costs over a period of 25 years; same must be true of Olympic Foods, which is about to celebrate its 25th anniversary. The arguments is based on questionable assumptions and weak analogies and appears to be a result of a hasty generalization.
The main problem with the author’s reasoning is the weak analogy he develops between the two “processing” industries. One fails to see any logical connection between the two and the author makes no effort to show the connection either. The two industries are too dissimilar to be compared. For example: frozen food industry faces problem of storage, transportation, contamination etc; no similar problems are observed in the film-processing industry. Even the markets for the two differ widely. The argument could have been strong if the author could show the missing connection or if he had compared the frozen-food industry with a similar industry.
Also the author fails to recognize that it’s not the number of years of experience that matters; what actually matters is what is learnt over all those years.
An industry may mature over a couple of years, yet another may remain stagnant even after 25 years. The color-film industry people may have tremendous learnings that may have contributed to the cost-reduction; but the report shows no evidence of Olympic Foods doing the same.
Another point that the author misses completely is that there may be factors other than just the expertise and experience gained over the mentioned period. For example: developments in technology may have resulted in the cost-reduction for the color-film processing industry. The author could have strengthened his stand by showing that it’s merely the increased efficiency that has brought costs down. He could have also chosen to highlight similar developments in the food-processing industry too.
To sum, the author’s conclusion doesn’t appear to be convincing at all. The author could have made it a bit persuasive by presenting the evidence mentioned above. Without these, the argument is weak and fails to impress the reader.