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QUESTION 1 1. Suppose that a company has determined that a 73% experience curve accurately describes the evolution of its production costs for a new line. If the first unit costs $100 to produce, what should the 10,000th unit cost based on the experience curve?

QUESTION 1 1. Suppose that a company has determined that a 73% experience curve accurately describes the evolution of its production costs for a new line. If the first unit costs $100 to produce, what should the 10,000th unit cost based on the experience curve?

Elements Of Electromagnetics
Elements Of Electromagnetics
7th Edition
ISBN:9780190698614
Author:Sadiku, Matthew N. O.
Publisher:Sadiku, Matthew N. O.
ChapterMA: Math Assessment
Section: Chapter Questions
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QUESTION 1 1. Suppose that a company has determined that a 73% experience curve accurately describes the evolution of its production costs for a new line. If the first unit costs $100 to produce, what should the 10,000th unit cost based on the experience curve? QUESTION 2 1. An oil company is considering the optimal timing for the construction of new refineries. From past experience, each doubling of the size of a refinery at a single location results in an increase in the construction costs of about 68%, Furthermore, a plant size of 10,000 barrels per day costs $6 million. Assume that the demand for the oil is increasing at a constant rate of two million barrels yearly and the discount rate for future costs is 15%. a. Find the values of k and a assuming a relationship of the form fy) = k yª . Assume that y is in ynits of barrels per day. b. Determine the optimal timing of plant additions and the optimal size of each plant. c. What is the cost of each plant addition? с. QUESTION 3
Transcribed Image Text:QUESTION 1 1. Suppose that a company has determined that a 73% experience curve accurately describes the evolution of its production costs for a new line. If the first unit costs $100 to produce, what should the 10,000th unit cost based on the experience curve? QUESTION 2 1. An oil company is considering the optimal timing for the construction of new refineries. From past experience, each doubling of the size of a refinery at a single location results in an increase in the construction costs of about 68%, Furthermore, a plant size of 10,000 barrels per day costs $6 million. Assume that the demand for the oil is increasing at a constant rate of two million barrels yearly and the discount rate for future costs is 15%. a. Find the values of k and a assuming a relationship of the form fy) = k yª . Assume that y is in ynits of barrels per day. b. Determine the optimal timing of plant additions and the optimal size of each plant. c. What is the cost of each plant addition? с. QUESTION 3
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