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Hi,
Here is an example from the study text, I understand how to work out everytnig apart from the incremental total time in hrs. Could you please tell me how they wotk out the incremental total time in hours?A first unit of output of a new product requires 100 hours. An 80% learning curve applies. The production times would be as follows
No of units Cumulative avg Cumulative Incremental Incremental Incremental
(cumulative) time per unit (hrs) total time hrs no of units total time hrs avg time hrs1 100.00 100.00 – – –
2 80.0 160.00 1 60.00 60.00
4 64.0 256.00 2 96.00 48.00
8 51.2 409.60 4 153.60 380.40Thanks
It is very difficult to follow what is in your question because of the tabbing.
However I will try my best.
What the learning rule gives you is the average time per unit.
So, if the first unit takes 100 hours, then if you make 2 units then the average time per unit will be 80% x 100 = 80 hours.
But this is the average time per unit. So it means that the total time to make 2 units is 2 x 80 = 160 hours.
We already know that the first unit took 100 hours, and so if the total time to make 2 units is 160 hours then it must mean that the time taken for the second unit is 160 – 100 = 60 hours.
Have you watched my lecture on this? 🙂
Thanks John, that makes sense now. The layout appeared different once I posted the message, it makes it harder to read.
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