- This topic has 1 reply, 2 voices, and was last updated 7 years ago by
.
- Posts
The time for the first batch of 50 units was 400hrs but the labour budget is the subject of a learning effect of 90%. Rate of pay 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 =-0.152
What is the cost of this second order?
I worked in batches subtracting 17 batches (850u/50u) from 1 batch (50u/50u).
Y= 400hrs x 1^-.152 = 400hrs x 1batch = 400hrs in total
Y = 400hrs x 17^-.152 = 260hrs x 17 batches = 4,420hrs in total
Then 4,020hrs -400hrs = 3,620hrs x $12 per hr = $43,440
But the answer used 12 batches (600u/50u) and subtracted 28 batches (1400u/50u) and got answer of $41,509.
Regardless of how we structure the batches shouldn’t we get the same answer ? I don’t know what I’m doing wrong.
Why have you subtracted 17 batches from 1 batch – there is no logic to this at all.????
They have already made 600/50 = 12 batches.
If they now make another 800, then they will have made 1,400 in total which is 28 batches.Therefore you need the time for 28 batches less the time for 12 batches, and the answer is correct.
I suggest that you watch my free lectures on learning curves. The lectures are a complete course for Paper F5 and cover everything needed to be able to pass the exam well.
- The topic ‘Learning Curve’ is closed to new replies.