2. Suad Alwan, the purchasing agent for Dubai Airlines, has found that the fifth
ID: 329268 • Letter: 2
Question
2. Suad Alwan, the purchasing agent for Dubai Airlines, has found that the fifth plane it needed from a Brazilian manufacturer took that firm 18,000 hours to produce. Using an 85% learning curve and a $40-per-hour labor charge, Suad wishes to calculate what twelve additional planes should cost Time required for the twelfth unit hours (round your response to the nearest whole number). Cost of the twelfth unit # Time required for the thirteenth unit dollars (round your response to the nearest whole number). number). Cost of the thirteenth unit - Time required for the fourteenth unit- hours (round your response to the nearest whole dollars (round your response to the nearest whole number) hours (round your response to the nearest whole number). Cost of the fourteenth unit # dollars (round your response to the nearest whole number). Time required for the fifteenth unit hours (round your response to the nearest whole number). Cost of the fifteenth unit- dollars (round your response to the nearest whole number) hours (round your response to the nearest The combined time for the four planes
Explanation / Answer
Given
Learning curve rate = 85%, LR = 0.85
Time required for the fifth unit = 18000 hours
Answer 1) Time required for the Nth Unit is given by,
Tn = T1* n^ b,
Where,
Tn = Time taken to complete the nth Unit
T1 = Time taken to complete the 1st Unit
b = ln LR / ln 2 = (ln0.85/ln2) = -0.234
Also , the cost of producing the nth unit = Tn * $ 40
So, using the above formulas we have ,
T5 = T1* 5^(ln0.85/ln2)
Therefore T12 = T1 * 12 ^ b,
Answer 2) Cost of the 12th Unit = $ 40 * T12 = 40 * 14660 = $ 586390
Answer 3) T13 = T1 * 13 ^ b,
Answer 4) Cost of the 13th Unit = $ 40 * T13 = 40 * 14387 = $ 575487
Answer 5)Similarly, T14 = 14139 hours
Answer 6) Cost of the 14th Unit = $ 40 * T14 = 40 * 14139 = $ 565574
Answer 7)Similarly, T15 = 13912 hours
Answer 8) Cost of the 15th Unit = $ 40 * T15 = 40 * 13912 = $ 556499
Answer 9) Combined time for the 4 planes = 57098 Hours
Answer 10) Combined cost of the 4 planes = $2283950
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