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Exam 26: Learning Curves

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Question 61

True/False

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The learning curve in the steel industry and the learning curve in heart transplants have both been estimated at 79 percent.

A) True
B) False

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Question 62

Multiple Choice

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The first unit of a product took 1,000 hours to build and the learning curve is 85%.How long will it take to make the first 5 units? (Use Table E.3)

A) less than 4,005 hours
B) from 4,005 to 4,015 hours
C) from 4,015 to 4,025 hours
D) from 4,025 to 4,035 hours
E) from 4,035 to 4,045 hours

F) A) and B)
G) D) and E)

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Question 63

Multiple Choice

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Which one of the following statements about learning curves is TRUE?

A small manufacturer builds wooden pleasure boats in a craftsman manner by traditional labor-intensive methods.The first boat is estimated to take 650 hours of skilled labor,which cost $40 per hour.They currently have three workers that can work 2,000 hours a year.They assume that there is a 90% learning curve.How many boats can they build in their first year?

Which of the following is FALSE regarding learning curves?

A firm that successfully pursues a steeper-than-industry-average learning curve and manages costs down may still fail if,by underestimating a strong competitor,it fails to gain the added volume necessary for the learning curve to exist.

On an ordinary graph,unit times for a learning curve decrease at a decreasing rate,but on a log-log graph,the learning "curve" appears as a straight line.

A contractor builds large ships for the Department of Defense.A recent contract called for 12 amphibious landing platforms.It was originally estimated that the first of these would cost $1 billion and that 80 percent learning would be appropriate.In fact,the first ship cost $1.6 billion and the second $1.12 billion.What is the revised learning curve? What will be the total cost of the twelve ships? Is it higher or lower than the original estimate? If the defense department cuts the contract from 12 ships to 9,what happens to the average cost per ship?

Which of the following is a limitation of the use of learning curves?

A company is preparing a bid on a government contract for 40 units of a certain product.The operations manager estimates the assembly time required for the first two units to be 10.4 hours and 8.3 hours,respectively. a.What is the appropriate learning curve? b.What is the average time per unit for the 40 units? c.Which unit,if any,will require approximately one-half the time of the first unit?