Course Solutions Uncategorized Learning Curve Problem Company Ordered Make 6 Custom Made Parts Labor Costs Manufacturing Q34314198

Learning Curve Problem Company Ordered Make 6 Custom Made Parts Labor Costs Manufacturing Q34314198

Learning curve problem:

A company was ordered to make 6 custom made parts. the laborcosts of manufacturing all of the parts was $1000, and themanager’s estimate an improvement coefficient of .6. what would bethe labor costs of the next (identical) 3 part order.

Expert Answer


Given That,

Improvement Coefficient = 0.6

Learning Rate = 1-0.6 = 0.4

New Labor cost for identical 3 part order = Labor Cost for 6part order*(Learning Rate)^(ln3/ln2)

New Labor cost for identical 3 part order =1000*(0.4)^(ln3/ln2)

New Labor cost for identical 3 part order =1000*0.2340346 = 234.03

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