1.
Citing facts drawn1 from the color-film processing industry that indicate a downward trend in the costs of film processing over a 24-year period, the author argues that Olympic Foods will likewise be able to minimize costs and thus maximize profits in the future. In support of this conclusion the author cites the general principle that "as organizations learn how to do things better, they become more efficient." This principle, coupled with the fact that OlympicFoods has had 25 years of experience in the food processing industry leads to the author's rosy2 prediction. This argument is unconvincing because it suffers from two critical flaws.
First, the author's forecast of minimal3 costs and maximum profits rests on the gratuitous4 assumption that Olympic Foods' "long experience" has taught it how to do things better. There is, however, no guarantee that this is the case. Nor does the author cite any evidence to support this assumption. Just as likely, Olympic Foods has learned nothing from its 25 years in the food-processing business. Lacking this assumption, the expectation of increased efficiency is entirely5 unfounded.
Second, it is highly doubtful that the facts drawn from the color-film processing industry are applicable to the food processing industry. Differences between the two industries clearly outweigh6 the similarities, thus making the analogy highly less than valid7. For example, problems of spoilage8, contamination, and timely transportation all affect the food industry but are virtually absent in the film-processing industry. Problems such as these might present insurmountable obstacles that prevent lowering food-processing costs in the future.
As it stands the author's argument is not compelling. To strengthen the conclusion that Olympic Foods will enjoy minimal costs and maximum profits in the future, the author would have to provide evidence that the company has learned how to do things better as a result of its 25 years of experience. Supporting examples drawn from industries more similar to the food-processing industry would further substantiate9 the author's view.
2.
In this argument the author concludes that the Apogee10 Company should dose down field offices and conduct all its operations from a single, centralized location because the company had been more profitable in the past when all its operations were in one location. For a couple of reasons, this argument is not very convincing.
First, the author assumes that centralization would improve profitability by cutting costs and streamlining supervision11 of employees. This assumption is never supported with any data or projections12. Moreover, the assumption fails to take into account cost increases and inefficiency13 that could result from centralization. For instance, company representatives would have to travel to do business in areas formerly14 served by a field office, creating travel costs and loss of critical time. In short, this assumption must be supported with a thorough cost-benefit analysis of centralization versus15 other possible cost-cutting and/or profit-enhancing strategies.
Second, the only reason offered by the author is the claim that Apogee was more profitable when it had operated from a single, centralized location. But is centralization the only difference relevant to greater past profitability? It is entirely possible that management has become lax regarding any number of factors that can affect the bottom line such as inferior products, careless product pricing, inefficient16 production, poor employee expense account monitoring, ineffective advertising17, sloppy18 buying policies and other wasteful19 spending. Unless the author can rule out other factors relevant to diminishing profits, this argument commits the fallacy of assuming that just because one event (decreasing profits) follows another (decentralization), the second event has been caused by the first.
In conclusion, this is a weak argument. To strengthen the conclusion that Apogee should close field offices and centralize. This author must provide a thorough cost-benefit analysis of available alternatives and rule out factors other than decentralization that might be affecting current profits negatively.