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