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Operations Management
has recently added a new product to their offerings. Manufacturing reports that production is going smoothly and factory workers are becoming familiar with the manufacture of this product. All expectations are that the current rate of learning will continue and the manufacture of future units will be more efficient (i.e. take less time). The following table shows the results for the first two units produced. Unit Produced 1 2 Time to manufacture (hours) 500 375 The firm has an order for two additional units. Assuming the pattern of learning curve continues (same rate): a. At what rate is learning occurring? b. How long will it take to produce the fourth unit? c. If the labor rate is $20 per hour, what is the cumulative average labor cost per unit for the first four units produced?

has recently added a new product to their offerings. Manufacturing reports that production is going smoothly and factory workers are becoming familiar with the manufacture of this product. All expectations are that the current rate of learning will continue and the manufacture of future units will be more efficient (i.e. take less time). The following table shows the results for the first two units produced. Unit Produced 1 2 Time to manufacture (hours) 500 375 The firm has an order for two additional units. Assuming the pattern of learning curve continues (same rate): a. At what rate is learning occurring? b. How long will it take to produce the fourth unit? c. If the labor rate is $20 per hour, what is the cumulative average labor cost per unit for the first four units produced?

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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A firm has recently added a new product to their offerings. Manufacturing reports that production is going smoothly and factory workers are becoming familiar with the manufacture of this product. All expectations are that the current rate of learning will continue and the manufacture of future units will be more efficient (i.e. take less time). The following table shows the results for the first two units produced. Unit Produced 1 2 Time to manufacture (hours) 500 375 The firm has an order for two additional units. Assuming the pattern of learning curve continues (same rate): a. At what rate is learning occurring? b. How long will it take to produce the fourth unit? c. If the labor rate is $20 per hour, what is the cumulative average labor cost per unit for the first four units produced?
Transcribed Image Text:A firm has recently added a new product to their offerings. Manufacturing reports that production is going smoothly and factory workers are becoming familiar with the manufacture of this product. All expectations are that the current rate of learning will continue and the manufacture of future units will be more efficient (i.e. take less time). The following table shows the results for the first two units produced. Unit Produced 1 2 Time to manufacture (hours) 500 375 The firm has an order for two additional units. Assuming the pattern of learning curve continues (same rate): a. At what rate is learning occurring? b. How long will it take to produce the fourth unit? c. If the labor rate is $20 per hour, what is the cumulative average labor cost per unit for the first four units produced?
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