Table G.1
-The production for a new product follows: The first unit will take 2,000 hours to produce and the learning rate is 90 percent.Currently,the company employs 40 workers,who each work 200 hours regular time per month.In which months will overtime be needed for the production schedule shown? Refer to the copy of Table G.1 above.
A)Month 4 only
B)Months 3 and 4 only
C)Months 1 and 2 only
D)Month 1 only

Question

Table G.1 
-The production for a new product follows:  The first unit will take 2,000 hours to produce and the learning rate is 90 percent.Currently,the company employs 40 workers,who each work 200 hours regular time per month.In which months will overtime be needed for the production schedule shown? Refer to the copy of Table G.1 above.
A)Month 4 only 
B)Months 3 and 4 only 
C)Months 1 and 2 only 
D)Month 1 only

Quizplus · Accepted Answer

To solve this problem, we need to determine how many hours are needed to produce each unit and compare that to the number of available regular time hours per month.
The first unit will take 2,000 hours to produce, but because of the 90% learning rate, the time needed for each subsequent unit will decrease by 10%. This means the time needed for the second unit will be 2,000 x (0.9) = 1,800 hours, the time needed for the third unit will be 1,800 x (0.9) = 1,620 hours, and so on.
Using Table G.1, we can see that the production schedule requires 320 units to be produced in total, spread over 6 months. To determine how many regular time hours are needed in each month, we can divide the total hours needed for each unit by the number of workers and the number of regular time hours per worker per month:
Month 1: (2,000 / 40 / 200) x 70 = 175 hours
Month 2: (1,800 / 40 / 200) x 110 = 247.5 hours
Month 3: (1,620 / 40 / 200) x 70 = 113.25 hours
Month 4: (1,458 / 40 / 200) x 55 = 79.35 hours
Month 5: (1,312.2 / 40 / 200) x 5 = 3.28 hours
Month 6: (1,180.98 / 40 / 200) x 20 = 11.76 hours
Therefore, we can see that overtime will be needed in Months 3 and 4 only as the regular time hours needed exceed the available regular time hours.

Table G.1 -The Production for a New Product Follows: the First