The time for the first batch of 50 units was 400 hours but the labour budget is the subject of a learning effect where the learning rate is 90%. The rate of pay is $12 per hour .
The business had received and satisfied an order for 600 units but is has now received a second order for another 800 units . Value for b = - 0.152
What will be the cost of this second order?
Ans:
Y = 400*12^-0.152
Y= 274.17285 hours
Total time = 3,290.07 hours
Time for first 1400 units (28 batches )
Y = 400*28^-0.152
Y= 241.04158 hours
Total time= 6,749.16 hours
Time for the first order = 6,749.16-3,290= 3,459.09 hours
Cost of second order = 3459.09*$12/hr = $41,509.08
Question:
if they are working with batches such as 1 batch = 50 units
How do they get time for first 1,400 units (28 batches )?
This is where I didn’t get it!
Thanks in advance
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6y ago#1They have made 600 units (12 batches) and they are now going to made another 800 units. So then they will have made 1,400 units (28 batches).
So the time for the new order of 800 units will be the time for 28 batches less the time for 12 batches. To get the times you use the formula given on the formula sheet as the answer you have typed out.
Have you watched my free lectures on learning curves?
Sir the 1 batch was = 50 units
How come was could 28 batches makes = 1,400 units ? Here was only my confusion. All others are ok.
Thanks
6y ago#328 batches x 50 units = 1,400 units !!!!
Oh thanks sir .
6y ago#5You are welcome :-)
How did we even know that it was 12 batches in the first place ?..I understand everything else but this.
Can you explain
3y ago#7The question says that they have already made 600 units. Given that each batch is of 50 units, then 600 units is 600/50 = 12 batches.
Hi Sir.
Why can't I get the same answer when I use per unit instead of per batch in the formula?
2mo ago#9The question says the time for the first batch of 50 units was 400 hours but the labour budget is the subject of a learning effect where the learning rate is 90%. The rate of pay is $12 per hour .
The business had received and satisfied an order for 600 units but is has now received a second order for another 800 units . Value for b = – 0.152
Quite simply, the discrepancy occurs because the learning effect is defined based on the first batch of 50 units, not the first single unit.
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