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I have encountered the below question and i am not able to get the correct answer with the method i have used. i will be really grateful if i could receive assistance on this regard.
QUESTION
A company is developing a new product first makes a prototype for testing, secondly makes a demonstration model, and then begins production. The time taken to make the prototype is 300 hours and from past experience of similar models, it is known that 90% learning curve applies.
The average time for the first two models is in (hrs):………ANSWER is 216
I’ve tried to solve the above by applying the below formula:
Y=ax^bY=time in hrs
a=no of hours incurred for the first unit
x=no of units
b=90% learning curveTherefore,
Y=300×2^(-0.1520) = 270
Hi, thanks for your question. I can see your thinking and the question wording is a certainly a bit vague.
However, Im assuming based on the answer of 216 that its actually asking for the average time per model for units 3 and 4 – i.e. the first two models which are made after the prototype and demo are completed.
i.e.
first unit takes 300 hours – this is prototype…
then 90% of this figure the no2 ‘demo model takes cumulative avg time per unit to 270 hours.
This gives us a total time for first two items of 540 hrs ( 2 x 270).Then as the output jumps to 4 units ( i.e. because we go from 1 to 2 to 4 etc).. we will be reducing our cumulative average time per unit to 243 hours each by the fourth item.
Total time for ALL four items will be 243 x 4 = 972 hoursDifference between total for four units and total time for first two units will be 432 hours (972h less 540h) … meaning that units 3 and 4 alone took an average of 432/2 = 216hours each.
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