I added exhibit 6.5, looking for a complete clear answer as I havent gotten on t
ID: 2616959 • Letter: I
Question
I added exhibit 6.5, looking for a complete clear answer as I havent gotten on these types of problems in the past. Appreciate it, Thanks!
Problem 6-5 Jack Simpson, contract negotiator for Nebula Airframe Company, is currently involved in bidding on a follow- up government contract. In gathering cost data from the first three units, which Nebula produced under a research and development contract, he found that the first unit took 2,500 labor hours, the second took 2,000 labor hours, and the third took 1,880 hours. Use Exhibit 6.5. In a contract for three more units, how many labor hours should Simpson plan for? (Round your answer to the nearest whole number.) Number of labor hoursExplanation / Answer
The First Unit took 2500 Hrs
The Second Unti took 2000 Hrs Thus Learning rate is 2000 / 2500 = 80%
Learning rate 80% means when ever the Production double the avg hous will be the 80% of Earlier Avg Hours
In The Given case Avg Hrs for First 3 Units = [ 2500 +2000 + 1880 ] / 3
= 2126.67 Hrs
When the Production DOuble ( 3 Units Existing + 3 Units Planned )
AVG Hrs for Later 3 Units = Avg Hrs of First 3 Units * 80%
= 2126.67 * 80%
= 1701.33 Hrs
Total Hrs required for 6 Units = Avg Hrs after production of 6 Units * 6
= 1701.33 * 6
= 10208 Hrs
Total Hrs taken for first 3 units = 6380 Hrs ( 2500 +2000 +1880 )
Total Hours taken for Last 3 Units = Total Hrs for 6 Units - Total Hrs for first 3 Units
= 10208 - 6380
= 3828 Hrs.
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