Question

Assume that a certain process has an 95% learning curve effect and the first unit took 4000hrs to produce.

Required:

1. Compute the number of hours required to produce the first 34 units                                                                                                                                                               (3 Marks)
2. Compute the number of hours required to produce 34th unit.                                                                                                                                                            (2 Marks)
3. iii) Assume that the wage rate is Kshs.100 per hour, compute the Labor cost of producing the last 16 units                              

Answer 1

| 1) Let 'y be the number of hours required to predine 34 units Total number of Houns required to you 34 unis 34 x 30P1.484 Hound. - 04 0.49 hout (11) "Number of - 16 units = to prod Hours requind 4000 40.959 y=ax" Where Hours a. = 4000x 0.81450615 required Hours required to produce first mit e 4ooo tondo Cumulative number of units (ii) Let y' be the Number of hours requat - 3258.025 Hours x - to be predge, 340 produce 33 units Yo axb. Ratio lagyo rogat blogy Elog 4000 + 13-15 y log 13 posal Hous required to produe 16 units - 1643268.025 loz b. learning coufficient = logarithm of learning Logaelthen of 2 = log 0.95 - 52.127.4 toms, Wage Rate per Hour a leshs. 100 Total labour cost for produing is units = 52,128.4 His x 900 z kl. 52,12840 logy logy = 3.48942 y Ant bag (5.48992) y = 307 3037 Hhows i Torel Number of Hours required 33 units - 338 9086 .3037 Homs = 1,01,914 Hours, to pred ! rog a + blogy log 4000 + (rego.as x log 24) - 3. 60206+ (-0.02224 x 1.5314-) 3.60306 0.1972992 3.488 Arilog (3.48876) Soft.4246 Hed. ... Number of Homs required to prodna 34th unit ,04,770147 -1,01,9146 2,856.4 hours y y