A company's production process has an 85 percent learning curve rate.The process has produced 1,000 units to date.A process refinement is estimated to allow a future learning curve rate for the identical product of 75 percent.However,the initial unit made using the new process will take the same amount of time as the initial unit produced using the old process.At what point,using the new process,will the production rate exceed the production rate achieved by the old process? A)By the 50^th unit B)By the 80^th unit C)By the 100^th unit D)By the 120^th unit E)By the 250^th unit

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Quizplus · Accepted Answer

The learning curve rate is a measure of how much time it takes to produce a unit of output as a function of the cumulative number of units produced. A learning curve rate of 85 percent means that each time the cumulative number of units produced doubles, the time it takes to produce a unit decreases by 15 percent.The process refinement is estimated to allow a future learning curve rate for the identical product of 75 percent. This means that each time the cumulative number of units produced doubles, the time it takes to produce a unit decreases by 25 percent.The initial unit made using the new process will take the same amount of time as the initial unit produced using the old process. This means that the learning curve for the new process starts at the same point as the learning curve for the old process.The production rate will exceed the production rate achieved by the old process when the cumulative number of units produced using the new process is greater than the cumulative number of units produced using the old process.The cumulative number of units produced using the old process is 1,000.The cumulative number of units produced using the new process that will exceed the production rate achieved by the old process is 1,000 / 0.75 = 1,333.Therefore, the production rate will exceed the production rate achieved by the old process by the 1,333rd unit.

A Company's Production Process Has an 85 Percent Learning Curve