essay - GMAT Analysis of an Argument1

Question:
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 celebrates twenty-fifth birthday, we can expect that our long experience will enable us to minimize costs and thus maximize profits."

Discuss how well reasoned you find this argument. In your discussion be sure to analyze the line of reasoning and the use of evidence in the argument. For example, you may need to consider what questionable assumptions underline the thinking and what alternative explanations or counterexamples might weaken the conclusion. You can also discuss what sort of evidence would strengthen or refute the argument, what changes in the argument would make it more logically sound, and what, if anything, would help you better evaluate its conclusion.


Answer:
This argument contains two clearly illogical elements: ignorance of difference between color firm processing and frozen food processing, and leap of logic in relationship between performance and experience.

First, although the argument cites an improvement in color firm processing as an example of a result of continuous improvement, this example is not enough to prove the effect. Since the improvement might have been brought by a technological invention, not by the experience that the industry had gained, this example can't strengthen the argument.

Second, the argument simply connects age of the company with performance, which is reduced costs in this context, that the company achieves. If this logic were true, all companies in the world would decrease their costs and make profits. However, the fact is different. For instance, as time goes, unexpected issues rise in front of companies and they deteriorate their success in spite of the fact that the companies have been gaining experience. Since experience is merely a part of its performance, the argument is illogical.

The argument needs a better example and a more logical explanation as mentioned above. By exemplifying continuous improvement citing a clear example and strengthening the statement adding some explanations of the profit the company will gain, the argument becomes clearer and more convincing.