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Spinster Co (Learning curve, BPP revision kit)

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Spinster Co (Learning curve, BPP revision kit)

  • This topic has 3 replies, 2 voices, and was last updated 7 years ago by AvatarJohn Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • August 1, 2018 at 5:24 pm #465575
    Avatarstulaganov
    Participant
    • Topics: 3
    • Replies: 2
    • ☆

    The Background: Spinster Co has developed a new product. The first batch of 10 units will take 300 labour hours to produce. There
    will be an 80% learning curve that will continue until 540 units have been produced. Batches after this level will
    each take the same amount of time as the 54th batch. The batch size will always be 10 units.
    Note: The learning index for an 80% learning curve is -0.3219
    Ignore the time value of money.

    The Question: The total time for the first 16 batches of units was 3,300 hours. What was the actual learning rate closest to
    the nearest %?

    Answer as per BPP revision kit:

    Batch 1, Total time 300, Average time/unit, 300
    Batch 2, Total time x, Average time/unit, 300 × r
    Batch 4, Total time x, Average time/unit, 300 × r2
    Batch 8, Total time x, Average time/unit, 300 × r3
    Batch 16, Total time 3300, Average time/unit, 300 × r4

    Working as per BPP revision kit:
    3,300 = 16 × 300 r4
    3,300/(16 × 300) = r4
    r = 0.91 or 91%

    Here I could not understand how the “3,300/(16 × 300)” is equal to 0.91. As per calculator, it should be equal to 0.69. Please help in clarifying. Thank you in advance!

    August 1, 2018 at 6:02 pm #465589
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54845
    • ☆☆☆☆☆

    3300/(16 x 300) = 0.6875

    However this is equal to r^4.

    Therefore r = fourth root of 0.6875, which is equal to 0.91 !!!

    I do suggest that you watch my free lectures on learning curves. The lectures are a complete free course for Paper PM and cover everything needed to be able to pass the exam well.

    August 1, 2018 at 6:44 pm #465599
    Avatarstulaganov
    Participant
    • Topics: 3
    • Replies: 2
    • ☆

    Dear Mr. Moffat,

    Thank you for the response, now it is clear.
    I watched your video lectures, they are concise yet very informative.

    Thank you indeed and the best regards!

    August 2, 2018 at 7:52 am #465697
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54845
    • ☆☆☆☆☆

    You are very welcome 🙂

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    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • The topic ‘Spinster Co (Learning curve, BPP revision kit)’ is closed to new replies.

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