ONLINE Regional Power owns 25 small power generating plants. It has contracted w
ID: 329270 • Letter: O
Question
ONLINE Regional Power owns 25 small power generating plants. It has contracted with Genco Services to overhaul the power turbines of each of the plants. The number of hours that Genco billed Regional to complete the third turbine was 500. Regional pays Genco $50 per hour for its services. All the turbines are 3. similar and an 80% learning curve is appropriate. As the maintenance manager for Regional, you are trying to estimate the cost of overhauling the: fourth unit 4th unit time 4th unit cost hours (round your response to two decimal places). dolars (round your response to the nearest whole number fifth unit: hours (round your response to two decimal places). dollars (round your response to the nearest whole number). 5th unit cost sixth unit: hours (round your response to two decimal places) dollars (round your response to the nearest whole number) 6th unit time 6th unit costExplanation / Answer
3.
The given problem is that of Learning Curve. The Learning Curve equation is as follows:
Tn = T1.nb
where,
Tn = Time for nth unit.
T1 = Time for first unit.
b = ln (Learning percentage) / ln 2, where ln = Natural logarithm.
Per hour payment = $ 50.
Time required to produce the third unit, T3 = 500 hours.
Learning percentage = 80% = 0.8.
T3 = T1 x 3b.
b = ln (Learning percentage) / ln 2 = ln (0.8) / ln (2) = – 0.322
500 = T1 x 3– 0.322
T1 = 500 / 3– 0.322 = 712.20 hours.
Time required for the fourth unit, T4 = T1 x n– 0.322 = 712.20 x 4– 0.322 = 455.76 hours.
Cost for the fourth unit = 455.76 x 50 = $ 22,788.
Overhaul Costs:
4th unit time = 455.76 hours.
4th unit cost = 22,788 dollars.
Time required for the fifth unit, T5 = T1 x n– 0.322 = 712.20 x 5– 0.322 = 424.16 hours.
Cost for the fifth unit = 424.16 x 50 = $ 21,208.
5th unit time = 424.16 hours.
5th unit cost = 21,208 dollars.
Time required for the sixth unit, T6 = T1 x n– 0.322 = 712.20 x 6– 0.322 = 399.98 hours.
Cost for the sixth unit = 399.98 x 50 = $ 19,999.
6th unit time = 399.98 hours.
6th unit cost = 19,999 dollars.
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