Question 1

Andrew Pallet Co., Inc.manufactures pallets for various manufacturing companies.Each new employee takes 10 hours to make the first pallet and 8 hours to make the second.The manufacturing overhead charge per hour is $80.Required:
a.What is the learning curve percentage assuming the cumulative average method?
b.What is the time needed to build 8 pallets by a new employee using the cumulative average-time method? Assume the rate of learning factor is -0.1520.
c.What is the time needed to produce the 16th pallet by a new employee using the incremental unit-time method? Assume the rate of learning factor is -0.3219.

Accepted Answer

The answer of Andrew Pallet Co., Inc.manufactures pallets for various...

Question 2

A learning curve is a function
A)that measures the decline in labour-hours per unit due to workers becoming better at a job.
B)that increases at a greater rate as workers become more familiar with their tasks.
C)where unit costs increase as productivity increases.
D)that is linear.
E)that measures productivity improvements from new technology.

Accepted Answer

A learning curve is a function that measures the decline in labour-hours per unit due to workers becoming better at a job. As workers become more skilled and experienced, they are able to produce more output with the same amount of labour-hours, leading to a decrease in unit costs.

Question 3

Each time Maiertree Care hires a new employee it must wait for some period of time before the employee can meet production standards.Management is unsure of the learning curve in its operations but it knows the first job by a new employee averages 60 hours and the second job averages 48 hours.Assume all jobs to be equal in size.Required:
a.What is the learning curve percentage, assuming the cumulative average-time method?
b.What is the time for a new employee to build 16 units with this learning curve using the cumulative average-time method? Assume the rate of learning factor is -0.1520.

Accepted Answer

The answer of Each time Maiertree Care hires a new...

Question 4

Vestor Ltd.has estimated a 90% incremental unit time learning curve applies to labour time to manufacture its new product.The first unit took 18 hours.If Vestor's estimates are correct, how many hours will be used to manufacture 4 total units?
A)14.58 hours
B)64.80 hours
C)72.00 hours
D)64.01 hours
E)58.32 hours

Accepted Answer

The answer of Vestor Ltd.has estimated a 90% incremental unit...

Question 5

When an average unit of time declines by a constant percentage each time that the cumulative quantity of units produced is doubled, it is known as
A)cumulative average time.
B)incremental unit time.
C)last unit time.
D)relative unit time.
E)cumulative unit time.

Accepted Answer

The answer of When an average unit of time declines...

Question 6

Vestor Ltd.has estimated a 90% cumulative average-time learning curve applies to labour time to manufacture its new product.The first unit took 18 hours.If Vestor's estimates are correct, how many hours will be used to manufacture 4 total units?
A)14.58 hours
B)64.80 hours
C)72.00 hours
D)64.01 hours
E)58.32 hours

Accepted Answer

The cumulative average time for 4 units is calculated using the formula: Y = aX^b, where Y is the cumulative average time per unit for X units, a is the time for the first unit, X is the total number of units, and b is the learning curve exponent (log of the learning rate/log of 2). For a 90% learning curve, b = log(0.9)/log(2) ≈ -0.152. Thus, Y = 18 * 4^(-0.152) ≈ 14.58 hours per unit. Total time for 4 units = 14.58 * 4 = 58.32 hours.

Question 7

Joe's Copy Centre hires a new employee.Joe knows he has to be patient with the employee until the employee gains enough experience to meet production standards.Joe is unsure of the learning curve in his operation, but he knows the first job by a new employee averages 40 minutes and the second job averages 32 minutes.Assume all jobs to be equal in size.Required:
a.What is the learning-curve percentage, assuming the cumulative average-time method?
b.What is the time for a new employee to do 32 jobs with this learning curve using the cumulative average-time method? You may use an index of -0.1520.

Accepted Answer

The answer of Joe's Copy Centre hires a new employee.Joe...

Question 8

To complete the first setup on a new machine took an employee 200 minutes.Using an 80% cumulative average-time learning curve indicates that the second setup on the new machine is expected to take
A)160 minutes.
B)120 minutes.
C)80 minutes.
D)60 minutes.
E)128 minutes.

Accepted Answer

The formula for cumulative average-time learning curve is:
Y = kx^n
Where:
Y is the time required to complete the task on the xth unit
k is the time required for the first unit
n is the learning curve coefficient

We know that:
k = 200 minutes (time required for the first setup)
n = ln(0.8)/ln(2) = -0.3219 (since the learning rate is 80%, the time should decrease as the number of units increase, hence the negative coefficient)

To find the time required for the second setup, we need to plug in the values:
Y = kx^n
Y = 200 x 2^(-0.3219)
Y = 200 x 0.7755
Y = 155.10 minutes

Therefore, the second setup on the new machine is expected to take 155.10 minutes, which is closest to B) 120 minutes.

Question 9

To complete the first setup on a new machine took an employee 200 minutes.Using an 80% incremental unit-time learning curve indicates that the second setup on the new machine is expected to take
A)160 minutes.
B)120 minutes.
C)80 minutes.
D)60 minutes.
E)128 minutes.

Accepted Answer

An 80% learning curve means that each time the cumulative production doubles, the time per unit decreases to 80% of the previous time. Therefore, the second setup would take 80% of 200 minutes, which is 160 minutes.

Question 10

An experience curve
A)is a narrower application of the learning curve.
B)measures the decline in cost per unit as production decreases for various value-chain functions such as marketing as production increases.
C)only measures the decline in labour-hours per unit as units produced increases.
D)measures the increase in cost per unit as productivity increases.
E)measures the increase in labour-hours per unit as units produced increases.

Accepted Answer

The answer of An experience curve
A)is a narrower application of...

Question 11

Harry's Picture manufactures various picture frames.Each new employee takes 5 hours to make the first picture frame and 4 hours to make the second.The manufacturing overhead charge per hour is $20.Required:
a.What is the learning-curve percentage, assuming the cumulative average method?
b.What is the time needed to build 8 picture frames by a new employee using the cumulative average-time method? Assume the rate of learning factor is -0.1520.
c.What is the time needed to produce the 16th frame by a new employee using the incremental unit-time method? Assume the rate of learning factor is -0.3219.

Accepted Answer

The answer of Harry's Picture manufactures various picture frames.Each new...

Quiz 10: Analysis of Cost Behaviour

A learning curve is a function

Vestor Ltd.has estimated a 90% incremental unit time learning curve applies to labour time to manufacture its new product.The first unit took 18 hours.If Vestor's estimates are correct, how many hours will be used to manufacture 4 total units?

When an average unit of time declines by a constant percentage each time that the cumulative quantity of units produced is doubled, it is known as

Vestor Ltd.has estimated a 90% cumulative average-time learning curve applies to labour time to manufacture its new product.The first unit took 18 hours.If Vestor's estimates are correct, how many hours will be used to manufacture 4 total units?

To complete the first setup on a new machine took an employee 200 minutes.Using an 80% cumulative average-time learning curve indicates that the second setup on the new machine is expected to take

To complete the first setup on a new machine took an employee 200 minutes.Using an 80% incremental unit-time learning curve indicates that the second setup on the new machine is expected to take

An experience curve