The personnel manager of Powerwest Inc. want to estimate the direct and cumulative average direct labor hours for producing 30 locomotive train units during then next year. He estimates from past experience that the learning rate is 90 percent. The production department estimate that manufacturing the first unit will take 30,000 hours. Each employee average 200 hours per month. The production rate forecast is as follows:MonthProduction Rate (units)MonthProduction Rate (units)January2July2February3August4March2September3April4October3May3November1June2December1 How many direct hours are required to produce the 30th unit?How many total hours are needed to produce all 30 units?What is the maximum number of employees required next year?If the learning rate were to change to 0.85, what would be the impact on the total hours and the number of employees needed to product 30 units?

A Small Introduction about Forecasting Forecasting is done to comprehend the interest that might…

Answered: How many direct hours are required to…

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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Question

The personnel manager of Powerwest Inc. want to estimate the direct and cumulative average direct labor hours for producing 30 locomotive train units during then next year. He estimates from past experience that the learning rate is 90 percent. The production department estimate that manufacturing the first unit will take 30,000 hours. Each employee average 200 hours per month. The production rate forecast is as follows:

Month	Production Rate (units)	Month	Production Rate (units)
January	2	July	2
February	3	August	4
March	2	September	3
April	4	October	3
May	3	November	1
June	2	December	1

How many direct hours are required to produce the 30^th unit?
How many total hours are needed to produce all 30 units?
What is the maximum number of employees required next year?
If the learning rate were to change to 0.85, what would be the impact on the total hours and the number of employees needed to product 30 units?

Expert Solution

Step 1

A Small Introduction about Forecasting

Forecasting is done to comprehend the interest that might emerge later on in light of the current deals.
In this manner, a gauge can be made to figure future interest.
This is finished by social affair information about different parts of the market.
Subsequently, this is the idea that we use for forecasting.