Question

A company is preparing a bid on a government contract for 40 units of a certain product. The operations manager estimates the assembly time required for the first two units to be 10.4 hours and 8.8 hours respectively. Approximately how long will it take to produce the last ten units?

Answer 1

Answer:

45.136 hours

Explanation:

learning rate = time needed to produce second unit / time needed to produce first unit = 8.8 hours / 10.4 hours = 0.8462 ≈ 85%.

time needed to produce the last 10 units = cumulative time needed to produce 40 units - cumulative time needed to produce 30 units

• cumulative time needed to produce 40 units = 10.4 hour x 21.43 (cumulative improvement factor for 40 units, 85%) = 222.872 hours
• cumulative time needed to produce 30 units = 10.4 hour x 17.09 (cumulative improvement factor for 30 units, 85%) = 177.736 hours

time needed to produce the last 10 units = 222.872 hours - 177.736 hours = 45.136 hours