Exam 26: Learning Curves

Which of the following is representative of a firm pursuing a learning-curve strategy?

A company is preparing a bid on a government contract for 40 units of a certain product.The operations manager estimates the assembly time required for the first two units to be 10.4 hours and 8.3 hours,respectively. a.What is the appropriate learning curve? b.What is the average time per unit for the 40 units? c.Which unit,if any,will require approximately one-half the time of the first unit?

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 first unit took 10 hours and the fourth unit 8.1 hours.What is the improvement rate?

The learning curve for a product is 80 percent.The first unit took 100 hours to complete.The manufacturer wants to determine how many hours the fifth unit will take by using the formula approach.What is the coefficient b for that calculation?

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

Learning curves have a variety of purposes.Your text places them into which three broad categories?

Joe's Manufacturing is considering bidding on a small order for 5 units.Based on similar products that they have made in the past,they believe that the first unit will take 500 labor hours.They also believe that there will be an 80% learning curve.How many hours of labor should Joe include for his bid?

Companies pursuing a learning curve strategy MUST increase which of the following?

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

When comparing a 70% learning curve versus a 90% learning curve,which one results in a more rapid reduction in labor requirements? Why?

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

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

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

The learning-curve table approach may be simpler to use than the formula approach,but it requires the presence of a table of learning-curve coefficients.

Learning curves can only be applied to labor.

Which of the following statements regarding the usefulness of learning curves is FALSE?

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

A small manufacturer builds wooden pleasure boats in a craftsman manner by traditional labor-intensive methods.The first boat is estimated to take 650 hours of skilled labor,which cost $40 per hour.They currently have three workers that can work 2,000 hours a year.They assume that there is a 90% learning curve.How many boats can they build in their first year?

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)