OPERATIONS MANAGEMENT -CONNECT
OPERATIONS MANAGEMENT -CONNECT
14th Edition
ISBN: 9781265205751
Author: Stevenson
Publisher: MCG
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Chapter 7.S, Problem 2CQ
Summary Introduction

To prepare: A list of observations regarding the information provided in this case.

Introduction:

An automobile manufacturer is making a product recall due to a defect in the steering mechanism, which would make the automobile to go out of control. The company pays a fair amount to its dealers. After discussion, the engineers came to a conclusion to fix the defect for $88 per repair at an hourly rate of $22 and their learning rate is 90%.

The company received complaints from its dealers related to the rate fixed by the engineers. The dealers claimed that their employees suggested a rate of $110 per repair. Each of the three mechanics completed two repairs. Average time taken for repairing the first unit was 9.6 hours and average time for the second unit was 7.2 hours.

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