Operations and Supply Chain Management
Operations and Supply Chain Management
14th Edition
ISBN: 9780078024023
Author: F. Robert Jacobs
Publisher: MCG
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Chapter 6, Problem 6OQ

a)

Summary Introduction

To determine: The estimate of the learning rate.

Introduction: It is the rate to measure the performance of the person in the new skills and in gaining experiences.

a)

Expert Solution
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Explanation of Solution

Given information:

Operations and Supply Chain Management, Chapter 6, Problem 6OQ , additional homework tip  1

Estimate the learning rate for Unit 1 to Unit 2:

It is calculated by dividing the time taken to complete the second unit and first unit.

Learning percentage=Time taken to complete second unitTime taken to complete first unit=1012=83.33%

Hence, the learning percentage is 83.33%.

Estimate the learning rate for Unit 2 to Unit 4:

It is calculated by dividing the time taken to complete the fourth unit and second unit.

Learning percentage=Time taken to complete fourth unitTime taken to complete second unit=6.510=65%

Hence, the learning percentage is 65%.

Estimate the learning rate for Unit 4 to Unit 8:

It is calculated by dividing the time taken to complete the eighth unit and fourth unit.

Learning percentage=Time taken to complete eighth unitTime taken to complete fourth unit=3.66.5=55.38%

Hence, the learning percentage is 55.38%.

Estimate the learning rate for Unit 8 to Unit 16:

It is calculated by dividing the time taken to complete the eighth unit and fourth unit.

Learning percentage=Time taken to complete sixteenth unitTime taken to complete eighth unit=2.73.6=75%

Hence, the learning percentage is 75%.

Determine the average learning rate:

Average learning rate=83.33%+65%+55.38%+75%4=278.714=69.68%70%

Hence, the average learning rate is 70%.

b)

Summary Introduction

To determine: The bid that Company L should submit for the total order of 100 units.

Introduction: It is the rate to measure the performance of the person in the new skills and in gaining experiences.

b)

Expert Solution
Check Mark

Explanation of Solution

Given information:

Operations and Supply Chain Management, Chapter 6, Problem 6OQ , additional homework tip  2

Determine the average learning rate:

Average learning rate=83.33%+65%+55.38%+75%4=278.714=69.68%70%

Hence, the average learning rate is 70%.

Determine the bid that Company L should submit for the total order of 100 units:

It is computed by subtracting the cumulative value for 20 units from cumulative value for 120 units and multiplying it with the cost to produce the first unit.

Cost to produce100 more units}=(Cumulative value for 120 unitsCumulative value for 20 units)×(Cost to producefirst unit)=(19.5707.407)×$12 million=12.163×$12 million=$145,956,000

The cumulative values can be determined using the table of cumulative values. For example, 19.570 is the cumulative value for 120 units and 70% learning rate.

Hence, the bid that Company L should submit for the total order of 100 units is $145,956,000.

c)

Summary Introduction

To determine: The expected cost for the last unit under the learning rate.

Introduction: It is the rate to measure the performance of the person in the new skills and in gaining experiences.

c)

Expert Solution
Check Mark

Explanation of Solution

Given information:

Operations and Supply Chain Management, Chapter 6, Problem 6OQ , additional homework tip  3

Determine the average learning rate:

Average learning rate=83.33%+65%+55.38%+75%4=278.714=69.68%70%

Hence, the average learning rate is 70%.

Determine the expected cost for the last unit under the learning rate:

It is computed by multiplying the cumulative value for 120 units with the cost to produce one unit.

Cost to produce120th unit}=Cumulative value for 120 units×(Cost to producefirst unit)=0.0851×$12 million=$1,021,200

The cumulative values can be determined using the table of cumulative values. For example, .0062 is the cumulative value for 120 units and 70% learning rate.

Hence, the expected cost to produce 120th units is $1,021,200.

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