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this question from kaplan Exam kit
The time taken to produce the first batch of 50 units was 400 hours but the labour budget is
subject to a learning effect where the learning rate is 90%. The rate of pay for labour is
$12 per hour.
The business had received and satisfied an order for 600 units but it has now received a
second order for another 800 units.
The value of b is = –0.152this is the answer
Time for the first order:
Y = axb
Y = 400 × 12 –0.152
Y = 274.17285 hours
Total time = 3,290.07 hours
Time for first 1,400 units (28 batches)
Y = axb
Y = 400 × 28 –0.152
Y = 241.04158 hours
Total time = 6,749.16 hours
Time for second order = 6,749.16 – 3,290.07 = 3,459.09 hours
Cost of second order = 3,459.09 × $12/hr = $41,509.08i don’t understand why i have to work with batch here and how should i know when i have to use them.
why 28 batch chosen why don’t have just selected 16 batch and just subtract the result from 12 ?
28 not even a double or somethingFirstly, because the question gives the time for the first batch we do the whole question based on batches.
(Had, instead, we been given the time for the first unit then we would have done the whole question on units, but we don’t know the time for the first unit).
Secondly, they have already made 12 batches and the new order is for 16 batches which takes the total up to 28 batches. So we look at the difference between 28 and 16 batches.
The fact that 28 does not involve doubling simply means that we have no choice but the use the formula to get the total for 28 batches. (16 does involves doubling and so for 16 you could either use the doubling rules or use the formula – that part of the answer would be the same either way apart from maybe rounding, which are irrelevant).
Have you watched my free lectures on learning curves? The lectures are a complete free course for Paper PM and cover everything needed to be able to pass the exam well.
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