A company has expanded its business to include the assembly of sewing machines. The 3rd sewing machine took 75 hours to be assembled and the 12th sewing machine took 59 hours. Based on the learning curve equation and a labour cost of $95/hour, the estimated cost of the 20h sewing machine is close to: (11) a) $7232 b) $3243 c) $4258 d) 85136
Expert Answer
By Crawford Formula,
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75 = a*3b
59 = a*12b
Taking Log of both the equation and solving linear equations
Log 75 – Log 59 = b (log3-log12)
b= – 0.16, a=87.9
Y20 = 87.9 * 20-0.16 = 54.4 hours
Cost =
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