A company\'s production process has an 80 percent learning curve rate. The proce

Question

A company's production process has an 80 percent learning curve rate. The process has produced 1,000 units to date. A process refinement is estimated to allow a future learning curve rate for the identical product of 75 percent. However, the initial unit made using the new process will take the same amount of time as the initial unit produced using the old process. At what point, using the new process, will the production rate exceed the production rate achieved by the old process?

Select one:

a. Before the 50th unit

b. Before the 80th unit

c. Before the 100th unit

d. Before the 120th unit

e. Before the 250th unit

Explanation / Answer

T = aNb

Where T= time to produce Nth units

a= time to produce first unit

b=slope=Log(learing rate)/log2

we need a*1000^(log0.8/log2)>=a*N(log0.75/log2)

i.e 1000^(log0.8/log2)>=N^log0.75/log2)

i.e. N^(log0.75/log2)<=0.108197

at N=250 N^(log0.75/log2)=0.101103 which is <=0.108197 hence option e is the right answer.

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