Question

The Speedy Wind Turbine Company (SWTC) won a bid to build ten wind turbines sold to a long time loyal customer. The fourth wind turbine was completed in 600 hours. The crew working on the project have demonstrated a 75% learning curve. a. How long should it take the same crew to finish the last six turbines? (5 points) b. There are 4 crewmembers working on the project. The average labor cost per hour per crewmember, including health benefits and retirement contribution, is $100. How much will be the total labor cost for the project - that is, for completing all 10 wind turbines combined? (5 points) c. Included in the bid submitted by SWTC are the following information: (1) Material cost per turbine - $10,000, (2) Overhead is 30 percent of labor and materials combined, and (3) Gross margin - 50% of material, labor, and overhead combined. How much was SWTC's bid price? Show detailed solution to receive full credit. (10 pts) d. Discuss fully the consequences if the actual learning rate for the job is actually 90%. Support your discussion with numbers using the information presented in (b) and (c) above. (5 points)

Answer 1

General lerning curve formule is Y=axb At Lerning rate 75 At learning rate 90 Batch Unites Cumulative average Hrs Total hrs Cumulative average Hrs Total hrs 600 600 600 505.0245 757.5368 521.3152276 781.9728 2.5| 10 1357.537 1381.973 600 1.5 Total labor cost Total hours *Number of Employees*cost per hour 1357.537*4*100* 1381.973*4*100 543014.8 552789.2 at 90% Particulars Material cost Labor OH(30%) Total Cost GP 50% Bid Price Bid Price at 75% 100000 543014.8 192904.4 835919.2 417959.6 1253879 100000 552789.2 195836.8 848626 424313 1272939 If Actualy Lerning rate is 90% then It effect as calculated above individually both the circumestances where learning curve is 75% and 90%