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Hi Dear Tutor, I need help.
My first question
Suppose that an 80% learning curve applies to production of a new product item ABC. To date (30 June) 30 units of ABC have been produced.Budgeted production in July is five units. The time to make the very first unit of ABC in January was 120 hours. The labor cost is $10 per hour.Calculate the budgeted total labor cost for July?
Total labour hours for the first 35 units—————1337.11 hours
Total labour hours for the first 30 units—————-1204.41 hours
When we deduct from 35 units 30 units do we get the total labour hours(132.7 hrs)hours for the first 5 units?
My second question
Flogel CO has just produced the first full batch of a new product taking 200 hours. Flogel has predicted a learning curve effect of 85%.b=-0.2345
When i solve this question by cumulative method I do the following
Total labour hours for the first 16 batches———1670.259084
((16^-0.2345)*200hrs)*16
Total labour hours for the first 1 batch—————–(200)
Total labour hous for the next15 batches—————1470.hours
or
Total labour hours for the first 15 batches—–1589.75 hours((15^-0.2345)*200hours)*15batches
my question here is that is this total labour hours for the nexts 15 batches or total labour hours for the first 15 batches? When i find total labour hours for the first 15 batches by formula method it does not give the same answer as above?and why?
My another question for instance
learning curver 80%. first unit is 100 hours.cumulative method. b=–0.3219280949
Total labour hours for the first 8 units———-409.6
Total labour hours for the first 2 units————80
Total labour hours for the next 6 units——–249.6 hours
or by formula method
Total labour hours for the first 6 units————-337 hours
((6^–0.3219280949)*100hours)*6 units
again why it is different?
Thanks in advance
First question:
I have not checked your calculation, but the time you have arrived at is not the time for the first 5 units. It is the time for the 5 units produced in July, which is what the question is requiring.
Your second question:
I do not know why on earth you are using the formula, when making 16 batches involves doubling and so it is faster and easier to use the doubling rule.
However think about it – if you know the total time for 16 batches and you know the time for the first batch, then the difference must be the time taken for the nest 15 batches.Your third question:
Yet again I do not know why you are using the formula given that making 8 units involves doubling and the doubling rule is quicker and easier.
However, whether you use the formula or the doubling rule the answer is the same and the difference between the time for 8 units and the time for the first 2 units is the time for the following 6 units. What you have done at the end is calculate the time for the first 6 units which is not the same thing.Whether or not you have already watched my free lectures on this, I suggest that you watch them again more slowly.
first question explanation understood
second question explanation-? correctly calcilated by using formula there should not be any fault.So it is important for me it is total hours for the first 15 batches or next 15 batches because it gave me different figures.
third question-the same as the second one.
whenever I deduct say for example from total hours for the first 8 units total hours for the first unit it gives me total hours for the next or following 7 units not the total labour hours for first 7 units
Previously i thought wrong now i got it.
thanks for explanation
The doubling rule and the formula only calculate the time for the first however many units.
So if they have already made (say) 30 units and we want the time for the next 5 units (making a total of 35 units) then we need to calculate the total time for 35 units and the total time for 30 units. So the time for the extra 5 is the difference between the two times.
Again, I do work through examples of this in my free lectures.
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