The summation of the report is making an ambiguous comparison of two entirely different industries to behave similarly. The reasons given in the statements are not cogent enough to convince the reader that food processing industry will lower its processing cost just on the base of experience.
First of all it is not necessary the costs go down due to experience. There are many reasons of reduction of cost which are being ignored. For instance, old technology gets outdated and gets lower in demand that’s why price is reduced. Moreover, it is dependent on the inflation as well. Increase in the price of electricity will increase the cost of processing.
Secondly, the comparison is made with the color film processing which is altogether a different industry. The change in cost in that industry depends on the technology. As technology gets advanced it becomes more efficient and sometimes it affects otherwise i.e. it increases the cost as new technology when launched is expensive. So we cannot conclude that with time and change of technology prices become lower.
The figures in the example given are not showing the reduction of price as well. It says in 1970 cost was 50 cents for five day service and in 1984 cost was 20 cents per day. This shows increase in the price 5 day service would cost 100 cents. So the fact presented here is erroneous as well. This statement is very hard to believe and it is not at all convincing.
In the food industry costs depend on the raw material and it fluctuated on daily basis. No one can determine that cost will be lower and profits will be higher. This statement is highly decisive for the stake holders because long experience doesn’t necessarily means the better cost effectiveness.