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

The argument that Olympic foods will be able to minimize costs and maximize profits, omits some important concerns that must be addressed to substantiate the argument. The statement that follows the reason behind this assumption, simply correlates number of years since the company started with the profits it might achieve after a considerable time. This alone does not constitute a logical argument and certainly does not provide support or proof of the main argument.

Firstly, the two industries are different. The result observed in one industry does not prove that the same will happen in other industry. It is possible that film processing company was able to decrease its cost because of some advancement in technology used to produce the raw materials required in this industry. The same is irrelevant to food industry and thus might not be applicable in this case.

Secondly, film processing company was able to decrease its costs and increase its profits in 14 years, which is considered a quite long experience. But we are not sure if 25 years are sufficient for food processing to become stable in the market. Thus, we cannot assure that the company will succeed in increasing its profits.

Further, there is a phenomenon in economics, economies and dis-economies of scale, in which the study tells that the company when operates in economies of scale tends to decrease its costs and increase its profits as the time passes. But if the company stays in the market for longer time, it might enter in dis-economies of scale, in which costs increases , decreasing profits, along with the time. Similarly, its possible that the color film processing industry is in economies of scale and therefore, it was successful in decreasing costs and thereby increasing profits. But if the food processing industry has entered dis-economies of scale, its profits might decrease.

Moreover, we have no information on food processing company's current business. It is possible that its current functioning is not as expected and has deteriorated since past few years. All these factors might affect the company's reputation. The numbers of years of functioning alone does not guarantee profits.

Because the argument leaves out several key issues, it is not sound or persuasive. If it included the items discussed above instead of solely considering long experience in estimating profits, the argument would have been more thorough and convincing.