Question

A product that is very labor intensive assembled at Boyds Aero Structure in Memphis has an average labor cost of $20/hr. Overhead expenses are charged at 100% of labor at this company. Time for the very first unit = 10 hours Time for the fourth unit = 8.1 hours The learning curve percentage for this operation is ________?

Answer 1

Answer:

A) 90%

Step-by-step explanation:

We know that by the learning curve, as cumulative output doubles the cumulative average time taken per unit decreases by a constant percent and the constant percent is the learning rate.

We need to double output 2 times in order to get from 1 to 4, so, we get the following:

$10*n^2=8.1\\n^2=0.81\\n=0.9=90%$

The conclusion is that the learning curve for this operation is 90%.