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Exam 22: Learning Curves

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Question 31

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A defence contractor has just started producing engines for a new government contract. The first engine took 800 hours to produce. If the learning curve is 80%, how long will it take to produce the first 20 engines? (Use at least three decimals in the exponent if you use the logarithmic approach, or Use Table E.3 (in the text) cumulative coefficient.)

A) less than or equal to 1000 hours
B) from 1000 to 8000 hours
C) from 8000 to 8500 hours
D) from 8500 to 10000 hours
E) 10,000 or more hours

F) B) and D)
G) C) and D)

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Question 32

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A certain product under development took 200 hours for the production of its 2nd unit and 180 hours for its 4th unit. a. What is the learning rate? b. How much time did the first unit take? c. How much time would the production of the 10th unit take? (Use both the logarithmic and the Table E.3 (in the text) approach. Do the two versions agree?)

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(a) 90%; (b) 222.2 hours; (c) ...

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Question 33

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Which of the following is not a limitation of the use of learning curves?

The first unit took 10 hours and the fourth unit took 8.1 hours to complete. What is the learning curve?

A small manufacturer builds wooden pleasure boats in a craftsman manner by traditional labour-intensive methods. The first boat is estimated to take 650 hours of skilled labour, which cost $40 per hour. They currently have three workers that can work 2,000 hours a year. They assume that there is a 90% learning rate. How many boats can they make in their first year?

Your firm has expertise with a special type of hand-finished furniture. The learning rate is known to be 82%. If the first piece of furniture took 6 hours, use the logarithmic approach to determine how long it will take to do the third unit.

If the 8th unit took 16.88 minutes and the learning curve is estimated to be 90% how long did it take to make the first unit?

If the learning curve for a process is 100%, then each unit in a series of units will have the same labour requirements.

An 80% learning curve means that with each unit increase in production, labour requirements fall by 20%.

A small manufacturer that offers "hand crafted" furniture has developed a new style of desk that they believe will be very successful in the marketplace. It is expected that the fifth desk will take about 47 hours of craftsmen's time to complete. They expect a 87.6% learning curve for this desk. a) How long did it take to make the first desk? b) How long will it take to make the 19th desk? c) The firm is considering accepting an order for 19 desks. How many hours of labour will this require for all 19?

A firm that successfully pursues a steeper-than-industry-average learning curve and manages costs down may still fail if, by underestimating a strong competitor, it fails to gain the added volume necessary for the learning curve to exist.

You are a cost accountant for a firm that specializes in "small" (under 10 billion dollars) defence contracts for specialty electronics products, such as fully portable, miniaturized CD-ROM imaging stations and global positioning transmitters/transponders. Your company is well respected in this field. One project up for competitive bids is a Field Service, Hands-Free, Individual Multi-Protocol Secure Communicator (a battlefield version of a cellular telephone, but built into each soldier's helmet, and containing necessary encryption technology). The Department of Defence wants 8 of these experimental devices to test their practicality. You have reviewed the contract specifications, and estimated that the first FSHFIMPSC should require 2350 hours, and that the product is subject to a 75% learning rate. All costs of the project (machine purchase, machine time, direct and indirect labour, and materials) have been bundled (allocated) into an hourly labour rate of $172 per hour. Determine the total project cost using the provided data.

Learning curves can be used to establish budgets.

Failure to consider the effects of learning can lead to ________ of labour needs.

When learning curves are plotted on ________ scales, the "curves" become straight lines.

A company is preparing a bid on a government contract for 15 units of a certain product. The operations manager estimates the assembly time required for the first two units to be 21.7 hours and 19.8 hours, respectively. a. What is the appropriate learning curve? b. What is the total time per unit for the 15 units? b. What is the average time per unit for the 15 units?

A product was priced assuming an 80% learning rate. How much extra labour (in $) will be required on the 4th product if the learning rate is actually 90%? Assume that labour costs $10/hour and the first unit cost $100 to produce.

Which one of the following courses of actions would not be taken by a firm wanting to pursue a learning curve steeper than the industry average?

Using the arithmetic concept determine how long it will take to make the 64th unit of a product if it took 1 hour to complete the first product with a 50% learning rate.

Learning curves are based on the premise that people and organizations become better at their tasks as the tasks are repeated.