experiences a learning rate of 80%. At a labor rate of $35 per hour, what should
ID: 415090 • Letter: E
Question
experiences a learning rate of 80%. At a labor rate of $35 per hour, what should you, as the purchasing agent, ex- pect to pay for the fifth unit? 8.9 Problem 8 identified how long it should take to complete the fifth oil-drilling platform that Natural Resources plans to purchase. How long should all five oil-drilling rigs take to complete? 8.8 It took MegaTech, Inc., 100,000 labor-hours to produce the first of several oil-drilling rigs for Antarctic explora- tion. Your company, Natural Resources, Inc., has agreed to purchase the fifth (steady state) oil-drilling rig from MegaTech's manufacturing vard. Assume that MegaTechExplanation / Answer
We will use Learning curve table to solve this problem
Answer to question 8.8 :
Time taken to produce 1st unit = 100,000 labor hours
Learning rate = 80%
Thus, Time required to produce 5th unit ( using standard learning curve table ) = 59563.73 hours
Amount purchasing agent expected to pay for 5th unit = $35/hour x 59563.73 hours = $2084730.55
Answer to question 8.9 :
As per Learning curve, total time taken by all 5 oil drilling rigs to complete = 373774.10 hours
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