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18 May, 18:36

Bachmann Products, Inc., has found that new products follow a learning curve. The first two units have been completed with the following results: Units Produced Marginal Labor Time 1 80.00 2 68.00 How much time will be needed to complete the 4th unit?

a. 74.00 hours.

b. 57.80 hours.

c. 56.00 hours.

d. 54.40 hours

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Answers (1)
  1. 18 May, 18:59
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    Time needed to complete the 4th unit = 57.80 hours

    Explanation:

    The learning curve theory states that as the cumulative output doubles the cumulative average time taken till date is reduced to a certain percentage of the previous time. This percentage is called learning rate

    Total time = Average time * cumulative number of units

    The cumulative average time is determined using the formula below:

    Y = aX^b

    a - time taken for the first unit produced

    b = log LR/Log 2

    X - cumulative units till date

    Y - cumulative average time taken for X units

    LR - Learning rate

    LR = 68/80 = 0.85 = 85%

    Time needed to complete the 4th unit

    = Learning rate * time take for the 2 unit

    = 85% * 68

    = 57.80 hours

    Time needed to complete the 4th unit = 57.80 hours
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Home » Business » Bachmann Products, Inc., has found that new products follow a learning curve. The first two units have been completed with the following results: Units Produced Marginal Labor Time 1 80.00 2 68.
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