A staff assistant at Warrington Corporation recently determined that the first five units completed in a new manufacturing process took 500 hours to complete, or an average of 100 hours per unit. The assistant also found that when the cumulative output produced doubles, the average labor time declines by 20%. On the basis of this information, how many total hours would Warrington use if it produces a cumulative amount of 40 units?
A) 128.
B) 160.
C) 1,280.
D) 2,048.
E) None of the answers is correct.

Question

Quizplus · Accepted Answer

The learning curve effect indicates that when output doubles, the average time per unit decreases by 20%. Starting with 100 hours per unit for the first 5 units, the average time for the next 5 units (10 units total) is 80 hours per unit. This pattern continues, and by calculating the total hours for each doubling (5, 10, 20, 40 units), the total hours for 40 units is 2,048.

A Staff Assistant at Warrington Corporation Recently Determined That the First