(Solved Homework): You’ve just completed a pilot run of 10 units of a major product and found the processing…

You’ve just completed a pilot run of 10 units of a major product and found the processing time for each unit was as follows: Use Exhibit 4A.5 and Exhibit 4A.6.

UNIT NUMBER		TIME (HOURS)
1		810
2		660
3		630
4		560
5		560
6		540
7		520
8		490
9		480
10		480

a. According to the pilot run, what would you estimate the learning rate to be? (Do not round intermediate calculations. Round your answer to the nearest whole percent.)

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b. Based on (a), how much time would it take for the next 190 units, assuming no loss of learning? (Round your answer to the nearest whole number.)

c. How much time would it take to make the 1,000th unit? (Round your answer to the nearest whole number.)

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Expert Answer

a) According to theory, the time per unit decreases at a constant rate each time the output doubles

(e.g., unit 1 to 2, 2 to 4, and 3 to 6).

Unit 2/Unit 1 = 660/810 = 0.81

Unit4/Unit 2 = 560/660 = 0.85

Unit6/Unit 3 = 540/630 = 0.86

Unit 8/ Unit 4 = 490/560 = 0.88

Unit 10/Unit 5 = 480/560 = 0.86

Hence, it can be taken as 85% Learning Curve

b) Time taken for next 190 units = Total time taken for 200 units – Time taken for first 10 units

Total time taken = T1*Time factor for nth unit

For 200 units, time factor is 74.79

T1 = 810

Total time for 200 units = 810*74.79 = 60,580 hours

Total time for first 10 units = 810+660+…….+480 = 5730 hours

Time for 190 units = 60580 – 5730 = 54,850 hours

c) Time for 1000th unit is = T1*Time factor for 1000th unit

Time factor for 1000th unit = 0.198

Time for 1000th unit = 810*0.198 = 160 hours

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