A company is preparing a bid on a government contract for 30 units of a certain product. There is some learning curve effect that can be observed. The operations manager estimates the assembly time required for the first two units to be 100 hours and 90 hours. What is average time per unit?

Average time per unit is 59.6 hours

Explanation:

As we know as the work is done the learning of the labor force increases and they require less time to produce the next unit. An average time required to produce specific numbers of unit including cumulative effect of the learning curve.

As per given data

Number of units = 30 unit

Ratio of Time to produce second unit = 90 / 100 = 0.9

Accumulated Average time per unit Formula is

y = aX^b

Where

y = Average time per unit = ?

X = Cumulative Numbers of unit = 30

a = Time required to produce first unit = 100 hours

b = factor used to calculate cumulative average time = log (Learning Curve % / log2) = Log (90/100) / Log2 = - 0.152

Place value value in the formula

y = 100 x 30^ - 0.152 = 59.6 hours