Question

Cost estimation, incremental unit-time learning model. Assume the same information for the Pacific Boat Company as in Problem 10-40 with one exception. This exception is that Pacific Boat uses a 90% incremental unit-time learning model as a basis for predicting direct manufacturing labor-hours in its assembling operations. (A 90% learning curve means b = –0.152004.)a. Prepare a prediction of the total costs for producing the six PT109s for the Navy. b. If you solved requirement 1 of Problem 10-35, compare your cost prediction there with the one you made here. Why are the predictions different? How should Blue Seas decide which model it should use?

Answer 1

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"Cost estimation, incremental unit-time learning model. Assume the same information for the Pacific Boat Company as in Problem 10-40 with one exception. This exception is that Pacific Boat uses a 90% incremental unit-time learning model as a basis for predicting direct manufacturing labor-hours in its assembling operations. (A 90% learning curve means b = –0.152004.)a. Prepare a prediction of the total costs for producing the six PT109s for the Navy. b. If you solved requirement 1 of Problem 10-35, compare your cost prediction there with the one you made here. Why are the predictions different? How should Blue Seas decide which model it should use?"

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