Exam 26: Learning Curves

You are a cost accountant for a firm that specializes in "small" (under 10 billion dollars)defense contracts for specialty electronics products,such as fully portable,miniaturized CD-ROM imaging stations and global positioning transmitters/transponders.Your company is well respected in this field.One project up for competitive bids is a Field Service,Hands-Free,Individual Multi-Protocol Secure Communicator (a battlefield version of a cellular telephone,but built into each soldier's helmet,and containing necessary encryption technology).The Department of Defense wants 8 of these experimental devices to test their practicality.You have reviewed the contract specifications,and estimated that the first FSHFIMPSC should require 2350 hours,and that the product is subject to a 75% learning curve.All costs of the project (machine purchase,machine time,direct and indirect labor,and materials)have been bundled (allocated)into an hourly labor rate of $172 per hour.Determine the total project cost using the provided data.

The formula approach to learning curve calculations allows us to determine the hours required for any unit.

Failure to consider the effects of learning can lead to ________ of labor needs.

Describe the earliest application of learning curve concepts to industry.

Your firm has a contract to make 20 specialty lenses for night vision equipment.The first one took 40 hours.Learning is expected at the 85% learning curve.How long will it take to finish all 20 units?

A defense contractor has just started producing turbines for a new government contract.The first turbine took 7000 hours to produce.If the learning curve is 90%,how long will it take to produce the 10th turbine? (Use at least three decimals in the exponent if you use the formula approach. )

Identify one advantage and one disadvantage of the doubling approach over the formula approach to learning curve calculations.

If it took 1000 hours to produce the first unit of a product,and the learning curve is 70%,how long will it take to produce units 26 through 50?

Why do different organizations have different learning curves?

When learning curves are plotted on ________ scales,the "curves" become straight lines.

If the learning curve for a process is 80 percent,that same process has a 20 percent ________.

In the formula approach to learning curve calculations,you have used the formula T_N = T₁ (N^b).Your manager shows you a problem for which b is specified as -.18443.What learning curve does that value represent?

Learning curves (or experience curves)were first applied to industry by ________ who was studying ________.

If the first unit in a series of units takes 200 days to complete,and the learning curve is 80%,then the second unit will take 160 days.

The first product took 10 hours to build and the learning curve is estimated to be 90%.How long will it take to make the fourth unit?

The first unit of a product took 900 hours to build and the learning curve is 90%.How long will it take to make the first 3 units? (Use Table E.3)

Using the doubling approach,determine how long it will take to make the 64^th unit of a product if it took 1 hour to complete the first product with a 50% learning curve.

The first unit of a product took 80 work days.The learning curve is estimated to be 90%.The time for the fourth unit will be about ________ work days and the time for the first four units will be about ________ work days.(Use Table E.3)

Experience curves are the opposite of learning curves-as one rises,the other falls.

A 90% learning curve implies that each time the production volume is doubled,the direct time per unit is reduced to 90% of its previous value.