Question

Woodman Products, Inc., has found that new products follow a learning curve. The first two units have been completed with the following results:

Units ProducedMarginal Labor Time
1190.00
2152.00
Required:
(a.) How much time will be needed to complete the 4th unit?
(b.) How much time will be needed to complete the 8th unit?
(c.) How much time will be needed to complete the 16th unit?

Answer 1

(a) 121.6

(b) 97.28

(c) 77.824

Step-by-step explanation:

Learning rate:

= Marginal labor time of producing 2 units ÷ Marginal labor time of producing 1 unit

= 152 ÷ 190

= 80%

• Units produced = 1

Marginal labor time of producing 1 unit = 190

• Units produced = 2

Marginal labor time of producing 2 units:

= Marginal labor time of producing 1 unit × Learning rate

= 190 × 80%

= 152

(a)

• Units produced = 4

Marginal labor time of producing 4 units:

= Marginal labor time of producing 2 units × Learning rate

= 152 × 80%

= 121.6

(b)

• Units produced = 8

Marginal labor time of producing 8 units:

= Marginal labor time of producing 4 units × Learning rate

= 121.6 × 80%

= 97.28

(c)

• Units produced = 16

Marginal labor time of producing 16 units:

= Marginal labor time of producing 8 units × Learning rate

= 97.28 × 80%

= 77.824