Question 1

Companies pursuing a learning curve strategy must increase

Accepted Answer

A)  employee training 
B)  costs 
C)  quality 
D)  volume 
E)  all of the above 
A)  employee training 
B)  costs 
C)  quality 
D)  volume 
E)  all of the above D

Question 2

The Learning-Curve Coefficients table reports that for 70 percent learning, the eighth unit has a unit time value of 0.343. Verify that table entry by use of the arithmetic method.

Accepted Answer

Successive doubling at 70 percent learning results in a factor of .700 for unit two, .490 for unit four, and 0.343 for unit eight.

Question 3

Explain how learning curves might be applied in a bid preparation application.

Accepted Answer

Learning curves can determine the reduction in labor and/or materials required to produce a specified number of units. Knowing these cost components, managers are better prepared to determine what to bid and when to promise finished goods.

Question 4

Learning curves are

Accepted Answer

A)  the same for all products but different for different organizations 
B)  the same for all organizations but different for different products 
C)  the same for all organizations and all products 
D)  different for different organizations and different products 
E)  appropriate in services but not in manufacturing 
A)  the same for all products but different for different organizations 
B)  the same for all organizations but different for different products 
C)  the same for all organizations and all products 
D)  different for different organizations and different products 
E)  appropriate in services but not in manufacturing

Question 5

The first unit of a product took 1,000 hours to build and the learning curve is 85%. How long will it take to make the first 5 units?

Accepted Answer

A)  less than 4,005 hours 
B)  from 4,005 to 4,015 hours 
C)  from 4,015 to 4,025 hours 
D)  from 4,025 to 4,035 hours 
E)  from 4,035 to 4,045 hours 
A)  less than 4,005 hours 
B)  from 4,005 to 4,015 hours 
C)  from 4,015 to 4,025 hours 
D)  from 4,025 to 4,035 hours 
E)  from 4,035 to 4,045 hours

Question 6

The fourth unit of production took 80 minutes while the ninth unit of production took 50 minutes. How long did the first unit take?

Accepted Answer

T(1)=80/(4^b)=50/(9^

Question 7

In addition to labor, to which other variables have learning curves been applied?

Accepted Answer

The text cites materials and p

Question 8

Experience curves may be valid for industrial applications, but have no role in services such as health care procedures.

Accepted Answer

A) True 
 B)False

Question 9

The first unit took 79 hours; the tenth took 46 hours. What learning rate is implied by the data?

Accepted Answer

The improvement is 4

Question 10

The fundamental premise underlying learning curve analysis is that

Accepted Answer

A)  tasks can be easily learned in organizations 
B)  organizations and people become better at their tasks as the tasks are repeated 
C)  learning takes place when people in organizations change 
D)  total labor costs decrease as the number of production units increases 
E)  doubling output cuts labor requirements per unit in half 
A)  tasks can be easily learned in organizations 
B)  organizations and people become better at their tasks as the tasks are repeated 
C)  learning takes place when people in organizations change 
D)  total labor costs decrease as the number of production units increases 
E)  doubling output cuts labor requirements per unit in half

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

A contractor builds large ships for the Department of Defense. A recent contract called for 12 amphibious landing platforms. It was originally estimated that the first of these would cost $1 billion and that 80 percent learning would be appropriate. In fact, the first ship cost $1.6 billion and the second $1.12 billion. What is the revised learning rate?
 What will be the total cost of the twelve ships?
 Is it higher or lower than the original estimates?
 If the defense department cuts the contract from 12 ships to 9, what happens to the average cost per ship?

Accepted Answer

The original estimates called for $1 bil

Question 13

On an ordinary graph, unit times decrease at a decreasing rate, but on a log-log graph, the learning "curve" appears as a straight line.

Accepted Answer

A) True 
 B)False

Question 14

A 100% learning curve implies that

Accepted Answer

A)  learning is taking place for all products and workers 
B)  learning is taking place at the best possible level 
C)  a 100% reduction in the direct labor time takes place each time the production is doubled 
D)  no learning is taking place 
E)  None of the above is true. 
A)  learning is taking place for all products and workers 
B)  learning is taking place at the best possible level 
C)  a 100% reduction in the direct labor time takes place each time the production is doubled 
D)  no learning is taking place 
E)  None of the above is true.

Question 15

Learning curves can be applied to a variety of purposes internal to a firm, including

Accepted Answer

A)  labor forecasting 
B)  scheduling 
C)  establishing costs 
D)  establishing budgets 
E)  all of these 
A)  labor forecasting 
B)  scheduling 
C)  establishing costs 
D)  establishing budgets 
E)  all of these

Question 16

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 rate. 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.

Accepted Answer

From Table E.3, 2350 * 4.802 =

Question 17

The first unit of a product took 832 hours to build, and the learning curve is 90%. How long will it take to make the 25th unit? (Use at least three decimals in the exponent if you use the logarithmic approach.)

Accepted Answer

A)  time ≤ 500 hours 
B)  500  550 
A)  time ≤ 500 hours 
B)  500  550

Question 18

A company negotiates a price for two aircraft that includes a reduction in labor on the second aircraft consistent with a 70% learning curve. Suppose the first aircraft took 100 hours. If the improvement rate changes to 20%, how will the total time to complete both aircraft change?

Accepted Answer

A)  no change 
B)  -10 hours 
C)  + 10 hours 
D)  -50 hours 
E)  + 50 hours 
A)  no change 
B)  -10 hours 
C)  + 10 hours 
D)  -50 hours 
E)  + 50 hours

Question 19

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.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following statements comparing learning curve rates (L) to improvement rates is true?

Accepted Answer

A)  The learning rate is the same as the improvement rate. 
B)  The learning rate is a decimal value while the improvement rate is a percentage. 
C)  A 90 percent learning curve corresponds to a 10 percent rate of improvement. 
D)  Learning rates apply to labor only, while improvement rates apply to all resources. 
E)  "Learning rates" is American usage, while "improvement rates" is British. 
A)  The learning rate is the same as the improvement rate. 
B)  The learning rate is a decimal value while the improvement rate is a percentage. 
C)  A 90 percent learning curve corresponds to a 10 percent rate of improvement. 
D)  Learning rates apply to labor only, while improvement rates apply to all resources. 
E)  "Learning rates" is American usage, while "improvement rates" is British.

Exam 25: Learning Curves

Companies pursuing a learning curve strategy must increase

The Learning-Curve Coefficients table reports that for 70 percent learning, the eighth unit has a unit time value of 0.343. Verify that table entry by use of the arithmetic method.

Explain how learning curves might be applied in a bid preparation application.

Learning curves are

The first unit of a product took 1,000 hours to build and the learning curve is 85%. How long will it take to make the first 5 units?

The fourth unit of production took 80 minutes while the ninth unit of production took 50 minutes. How long did the first unit take?

In addition to labor, to which other variables have learning curves been applied?

Experience curves may be valid for industrial applications, but have no role in services such as health care procedures.

The first unit took 79 hours; the tenth took 46 hours. What learning rate is implied by the data?

The fundamental premise underlying learning curve analysis is that

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

On an ordinary graph, unit times decrease at a decreasing rate, but on a log-log graph, the learning "curve" appears as a straight line.

A 100% learning curve implies that

Learning curves can be applied to a variety of purposes internal to a firm, including

The first unit of a product took 832 hours to build, and the learning curve is 90%. How long will it take to make the 25th unit? (Use at least three decimals in the exponent if you use the logarithmic approach.)

A company negotiates a price for two aircraft that includes a reduction in labor on the second aircraft consistent with a 70% learning curve. Suppose the first aircraft took 100 hours. If the improvement rate changes to 20%, how will the total time to complete both aircraft change?

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.

Which of the following statements comparing learning curve rates (L) to improvement rates is true?

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