1. Manceville Air has just produced the first unit of a large industrial compres
ID: 457595 • Letter: 1
Question
1. Manceville Air has just produced the first unit of a large industrial compressor that
incorporated new technology in the control circuits and a new internal venting system.
The first unit took 116 hours of labor to manufacture. The company knows from past
experience that this labor content will decrease significantly as more units are produced.
Your job as the
production cost
estimator is to
prepare the
estimate. Refer to Table below.
In reviewing past production data, it appears that the company has experienced a 90% learning
curve when producing similar designs.The company is interested in estimating the total time to complete the next 7 units.
Your job as the production cost estimator is to prepare the estimate. Refer to Table
Total manufacturing time for the:
First 8 units _______ hours (round your response to the nearest whole number)
Manufacturing time for the last 7 units(i.e., units 2 thru 8) = _____ hours (round your response to
the nearest whole number)
Please Show Work
80% 80% 85% 85% 90% 90% Unit Number Unit Total Total Time Unit Time Total Time Unit Time Total Time 8 .512 5.346 .614 5.936 .729 6.574Explanation / Answer
According to the Wright's learning curve theory Y = a(X^b) where: Y = the cumulative average time (or cost) per unit (for n number of Units) X = the cumulative number of units produced (i. e. n Units) a = time (or cost) required to produce the first unit. b = slope of the function when plotted on log-log paper. = log of the learning rate/log of 2. - Here in this question we have to find the time to produce the first 8 products, thus X= 8 Units - Time required to proudce the 1st Unit is 116 Hrs a= 116 Hrs The company has experiened 90% learning curve for any product in the past. Assuming that the company would experience the same learning curve to manufacture this product (industrial compressor)also b= 0.729 Y = a(X^b) 528 Hrs - This the company will take 528 Hrs to complete the first 8 Units of compressor. - Time taken by the last 7 Units is equal to Total time taken for 8 Units - Time for 1st Unit = 528-116 412 Hours
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