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 outweigh the similarities, thus making the analogy highly less than valid. For example, problems of spoilage, 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 authors 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 substantiate the authors view.
2. In this argument the author concludes that the Apogee 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 supervision of employees. This assumption is never supported with any data or projections. Moreover, the assumption fails to take into account cost increases and inefficiency that could result from centralization. For instance, company representatives would have to travel to do business in areas formerly 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 versus other possible cost-cutting and/or profit-enhancing strategies.
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