Question

CASE STUDY technologically advanced system. It understands that each computer must function 100% of the time when the equipment Entering the Global Market during a Recession world economic crash of 2008/9 created financial issues for leaves the fabrication facility The targeted research community ay companies around the world. Japan, as the second larq is a close-knit organization that spreads informal information et wonld economy after the US, had its share of challenges quickly through its ranks. Osaka Computer LLC cannot afford to and risks Maes s asocated with the 1989 collapse of the Tokyo Stock have negative press within this dlose-knit group Based on historical records, the normal learning curve is 93% Osaka Computer LLC also sees that once the fabricators have assembled 60 units, virtually all subsequent assemblies Exchange and then the world recession of 2008/9 ke puter LLC is justifiably cautious about entering new markets but market analysis indicates that ts business by of will require the same amount of time. The two prototype units ogy-intensive, re required 89 minutes to assemble and complete the initial thasanpt anewparallel-processing, technolo earch-focused computer. Osaka Computer LLC has developed a prototype that preliminary market analysis indicates would be eadily accepted in the research community How long will it take to assemble a unit from the 60th unit on? What else should Osaka Computer LLC take into consider tests lhe Osaka Computer LLC fabrication facility ype units as a means to develop the costs of building this ation, from a human resources perspective, for this potential ation, tro uilt two proto opportunity

Answer 1

The learning curve equation is interpreped as follows:

Y_N = Y₁ * N^b

Where,

Y_N = Time required to assemble the N-th part
Y₁ = Time required to assemble the first part = 89 minutes in this case.
b = Learning coefficient = LN(r) / LN(2) with r = learning rate = 0.93 in this case.

So,

b = LN(0.93) / LN(2) = -0.1047

And,

Y₆₀ = 89 * 60^-0.1047 = 57.97 minutes.

So, from the 60^th unit onward, each unit will take 58 minutes to assemble.

The other consideration is the recession itself. Note that during the recession, the labor market will remain flooded with skilled personnel who will be seeking jobs. In other words, the supply of skilled labor will be abundant. In this time, the company can hire the most skilled people from the labor market at a relatively low wage rate. This will cause the learning to be conducted in a much faster rate leading to a competitive advantage for the company in the market.