Module E – Learning Curves | Test Bank – 10th Global Ed

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Operations Management, 10e, Global Edition (Heizer/Render)

Module E Learning Curves

1) Experience curves may be valid for industrial applications, but have no role in services such as health care procedures.

Diff: 1

Topic: What is a learning curve?

Objective: LO-Module E-1

2) Experience curves are the opposite of learning curves–as one rises, the other falls.

Diff: 1

Topic: What is a learning curve?

Objective: LO-Module E-1

3) Learning curves are based on the premise that people and organizations become better at their tasks as the tasks are repeated.

Diff: 2

Topic: What is a learning curve?

Objective: LO-Module E-1

4) The earliest application of learning curves appears in the work of architect Frank Lloyd Wright.

Diff: 1

Topic: What is a learning curve?

Objective: LO-Module E-1

5) Learning curves can only be applied to labor.

Diff: 2

Topic: What is a learning curve?

Objective: LO-Module E-1

6) If the learning rate for a process is 100 percent, then each unit in a series of units will have the same labor requirements.

Diff: 2

Topic: What is a learning curve?

Objective: LO-Module E-1

7) If the first unit in a series of units takes 200 days to complete, and the learning rate is 80%, then the second unit will take 160 days.

Diff: 1

Topic: What is a learning curve?

AACSB: Analytic Skills

Objective: LO-Module E-1

8) An 80% learning curve means that with each unit increase in production, labor requirements fall by 20%.

Diff: 2

Topic: What is a learning curve?

Objective: LO-Module E-1

9) A 90% learning curve implies that each time the production volume is doubled the direct time per unit is reduced to 90% of its previous value.

Diff: 1

Topic: What is a learning curve?

Objective: LO-Module E-1

10) The learning rate in the steel industry and the learning rate in heart surgery have both been estimated at 79 percent.

Diff: 2

Topic: What is a learning curve?, and learning curves in services and manufacturing

Objective: LO-Module E-1

11) A project manager bases his time and labor estimates on a learning rate of 86%. The actual learning rate turns out to be 89%. The manager, because of the decreased learning, will complete his project in more time and with more labor use.

Diff: 2

Topic: Learning curves in services and manufacturing

Objective: no LO

12) The learning curve may not be permanent; it can be disrupted by changes in process, personnel, or product.

Diff: 2

Topic: Learning curves in services and manufacturing

Objective: no LO

13) Learning curves can be used to establish budgets.

Diff: 2

Topic: Learning curves in services and manufacturing

Objective: no LO

14) The arithmetic approach (or successive doubling approach) to learning curve calculations allows us to determine the hours required for any unit.

Diff: 2

Topic: Applying the learning curve

Objective: LO-Module E-2

15) The logarithmic approach to learning curve calculations allows us to determine the hours required for any unit.

Diff: 2

Topic: Applying the learning curve

Objective: LO-Module E-3

16) The learning curve coefficient approach may be simpler to use than the logarithmic approach, but it requires the presence of a table of learning coefficients.

Diff: 2

Topic: Applying the learning curve

Objective: LO-Module E-3

17) In the formula TN=T1Nb for the learning curve, the exponent b is the learning rate, expressed as a decimal.

Diff: 2

Topic: Applying the learning curve

Objective: LO-Module E-3

18) A firm that successfully pursues a steeper-than-industry-average learning curve and manages costs down may still fail if, by underestimating a strong competitor, it fails to gain the added volume necessary for the learning curve to exist.

Diff: 2

Topic: Strategic implications of learning curves

Objective: LO-Module E-4

19) On an ordinary graph, unit times decrease at a decreasing rate, but on a log-log graph, the learning "curve" appears as a straight line.

Diff: 2

Topic: Strategic implications of learning curves

Objective: LO-Module E-4

20) Reevaluation of learning curves is inappropriate.

Diff: 2

Topic: Limitations of learning curves

Objective: no LO

21) The fundamental premise underlying learning curve analysis is that

A) tasks can be easily learned in organizations

B) organizations and people become better at their tasks as the tasks are repeated

C) learning takes place when people in organizations change

D) total labor costs decrease as the number of production units increases

E) doubling output cuts labor requirements per unit in half

Diff: 2

Topic: What is a learning curve?

Objective: LO-Module E-1

22) Which of the following best conveys the essence of learning curves?

A) As the number of repetitions increases, time per unit increases.

B) As the number of repetitions decreases, time per unit increases.

C) As the number of repetitions increases, time per unit decreases.

D) As the number of repetitions increases, time per unit remains constant.

E) As the number of repetitions increases, time per unit doubles.

Diff: 2

Topic: What is a learning curve?

Objective: LO-Module E-1

23) A learning curve

A) plots man-hours per dollar versus time

B) is mathematically described by a parabola

C) should be plotted on polar coordinate graph paper

D) is based on the premise that organizations learn from experience

E) follows a normal distribution

Diff: 1

Topic: What is a learning curve?

Objective: LO-Module E-1

24) Learning curves have a variety of purposes, which can be placed into these broad categories:

A) services, industry, and military

B) internal, external, and strategic

C) wholesale, distribution, and retail

D) arithmetic, logarithmic, and learning coefficients

E) positive learning, neutral learning, and negative learning

Diff: 1

Topic: What is a learning curve?

Objective: LO-Module E-1

25) Learning curves (or experience curves) were first applied to industry by __________ who was studying __________.

A) Frank Lloyd Wright; architecture

B) Frank Gilbreth; worker efficiency

C) T. P. Wright; air frame manufacture

D) Lilian Gilbreth; factory efficiency

E) Frederick W. Taylor; scientific management

Diff: 1

Topic: What is a learning curve?

Objective: LO-Module E-1

26) A job with a 90% learning curve required 20 hours for the initial unit. The fourth unit should require approximately how many hours?

A) 16

B) 16.2

C) 18

D) 20

E) 54.2

Diff: 1

Topic: What is a learning curve?

AACSB: Analytic Skills

Objective: LO-Module E-1

27) Learning curves can be applied to a variety of purposes internal to a firm, including

A) labor forecasting

B) scheduling

C) establishing costs

D) establishing budgets

E) all of these

Diff: 1

Topic: What is a learning curve?

Objective: LO-Module E-1

28) Which of the following statements regarding the usefulness of learning curves is false?

A) An external use of learning curves is in supply-chain negotiations.

B) A strategic use of learning curves is in evaluating company and industry performance.

C) An internal use of learning curves is in establishing costs.

D) An internal use of learning curves is in labor forecasting.

E) A strategic use of learning curves is in establishing budgets.

Diff: 1

Topic: What is a learning curve?

Objective: LO-Module E-1

29) The fact that human activities typically improve when they are done on a repetitive basis is described by a

A) normal distribution curve

B) binomial distribution curve

C) learning curve

D) Poisson distribution curve

E) exponential curve

Diff: 1

Topic: What is a learning curve?

Objective: LO-Module E-1

30) A 100% learning curve implies that

A) learning is taking place for all products and workers

B) learning is taking place at the best possible level

C) a 100% reduction in the direct labor time takes place each time the production is doubled

D) no learning is taking place

E) None of the above is true.

Diff: 2

Topic: What is a learning curve?

Objective: LO-Module E-1

31) Which of the following statements is most appropriate with respect to a 70% learning curve?

A) There will be a 70% decrease in direct labor per unit each time the production volume doubles.

B) Each successive unit of production will take 70% of the direct labor of the previous unit.

C) There will be a 30% decrease in direct labor per unit each time production volume doubles.

D) Thirty percent of the production will be defective until full learning takes place.

E) None of the above is true.

Diff: 2

Topic: What is a learning curve?

Objective: LO-Module E-1

32) The learning curve rate is

A) the percentage of time it will take to make each unit when the production rate doubles

B) the log-log of the annual rate change divided by the average unit cost

C) always based on constant value dollars

D) only considered valid after one year of data is accumulated

E) always based on a constant work force

Diff: 1

Topic: What is a learning curve?

Objective: LO-Module E-1

33) Which of the following statements comparing learning rates to improvement rates is true?

A) The learning rate is the same as the improvement rate.

B) The learning rate is a decimal value while the improvement rate is a percentage.

C) A 90 percent learning curve corresponds to a 10 percent rate of improvement.

D) Learning rates apply to labor only, while improvement rates apply to all resources.

E) "Learning rates" is American usage, while "improvement rates" is British.

Diff: 1

Topic: Learning curves in services and manufacturing

Objective: no LO

34) Learning curves are

A) the same for all products but different for different organizations

B) the same for all organizations but different for different products

C) the same for all organizations and all products

D) different for different organizations and different products

E) appropriate in services but not in manufacturing

Diff: 2

Topic: Learning curves in services and manufacturing

Objective: no LO

35) The learning rate depends on the characteristics of a company. Which one of the following companies usually has the lowest learning rate and, therefore, the most learning?

A) a product-focused company which produces high-volume products to stock

B) a process-focused company which accepts orders from different customers with different specifications

C) a company with a newly-installed flexible manufacturing system (FMS)

D) a continuous process company

E) a labor intensive company

Diff: 3

Topic: Learning curves in services and manufacturing

Objective: no LO

36) Which one of the following statements about learning curves is true?

A) A learning curve assumes that the direct labor requirements per unit will DECREASE at an INCREASING rate as cumulative production increases.

B) Learning at a capital intensive operation will usually be LESS than it is for a labor intensive operation.

C) Learning for simple products will usually be MORE than it is for complex products.

D) Learning curves can be used only for individuals, not for the whole organization

E) None of the above is true.

Diff: 2

Topic: Learning curves in services and manufacturing

Objective: no LO

37) The learning rate for a product is 80 percent. The first unit took 100 hours to complete. The manufacturer wants to determine how many hours the fifth unit will take by using the logarithmic method. The coefficient b for that calculation is approximately

A) -.0969

B) -.2231

C) -.3219

D) .80

E) 1.903

Diff: 2

Topic: Learning curves in services and manufacturing

AACSB: Analytic Skills

Objective: no LO

38) The learning rate for a product is 90 percent. The first unit took 10 hours to complete. The manufacturer wants to determine how many hours the fourth unit will take by using the logarithmic method. The coefficient b for that calculation is approximately

A) -.1053

B) -.1520

C) -.3219

D) .6931

E) 8.1

Diff: 2

Topic: Learning curves in services and manufacturing

AACSB: Analytic Skills

Objective: no LO

39) The first unit of a product took 832 hours to build, and the learning rate is 75%. How long will it take to make the 10th unit? (Use at least three decimals in the exponent if you use the logarithmic approach.)

A) less than 250 hours

B) from 251 to 275 hours

C) from 276 to 300 hours

D) from 301 to 325 hours

E) 325 or more hours

Diff: 2

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-3

40) The first unit of a product took 832 hours to build, and the learning rate is 75%. How long will it take to make the 30th unit? (Use at least three decimals in the exponent if you use the logarithmic approach.)

A) less than 200 hours

B) from 200 to 225 hours

C) from 225 to 250 hours

D) from 2501 to 275 hours

E) 275 or more hours

Diff: 2

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-3

41) The first product took 10 hours to build and the learning rate is estimated to be 90%. How long with it take to make the fourth unit?

A) 10 hours

B) 9 hours

C) 8.1 hours

D) 7.5 hours

E) none of the above

Diff: 2

Topic: Applying the learning curve

Objective: LO-Module E-3

42) The second unit of production took 9 hours. If the learning rate is 90% how long did the first unit take?

A) 9 hours

B) 10 hours

C) 8.1 hours

D) 8.5 hours

E) none of the above

Diff: 2

Topic: Applying the learning curve

Objective: LO-Module E-3

43) The first unit took 10 hours and the fourth unit took 8.1 hours to complete. What is the learning rate?

A) 100%

B) 99%

C) 95%

D) 90%

E) 80%

Diff: 2

Topic: Applying the learning curve

Objective: LO-Module E-3

44) The first unit took 10 hours and the eighth unit took 1.25 hours. What is the learning rate?

A) 50%

B) 90%

C) 80%

D) 12.5%

E) none of the above

Diff: 2

Topic: Applying the learning curve

Objective: LO-Module E-2

45) The first unit took 10 hours and the fourth unit 8.1 hours. What is the improvement rate?

A) 99%

B) 95%

C) 90%

D) 15%

E) none of the above

Diff: 2

Topic: Applying the learning curve

Objective: LO-Module E-3

46) The first unit took 10 hours and the third unit took 5.7 hours. What is the improvement rate?

A) 70%

B) 30%

C) 50%

D) 90%

E) 10%

Diff: 2

Topic: Applying the learning curve

Objective: LO-Module E-3

47) The first unit of production took 10 hours with an 80% learning rate. How long will it take to complete both the first and second units?

A) 10 hours

B) 8 hours

C) 18 hours

D) none of the above

E) There is not enough information to solve the problem.

Diff: 2

Topic: Applying the learning curve

Objective: LO-Module E-3

48) It took 18 hours to complete the first two products with an 80% learning rate. How long did the second product take?

A) 8 hours

B) 10 hours

C) 18 hours

D) 8.1 hours

E) none of the above

Diff: 2

Topic: Applying the learning curve

Objective: LO-Module E-3

49) A company negotiates a price for two aircraft that includes a reduction in labor on the second aircraft consistent with a 70% learning rate. Suppose the first aircraft took 100 hours. If the improvement rate changes to 20%, how will the total time to complete both aircraft change?

A) no change

B) -10 hours

C) + 10 hours

D) -50 hours

E) + 50 hours

Diff: 2

Topic: Applying the learning curve

Objective: LO-Module E-3

50) Suppose that there are two products with the same first product time. However, product A has an improvement rate of 10% while product B has an improvement rate of 20%. How much longer will it take to make the 10th unit of product A compared to product B?

A) Both will have the time for the 10th unit.

B) A will take 48% more time.

C) A will take 48% less time.

D) A will take 23% less time.

E) none of the above

Diff: 2

Topic: Applying the learning curve

Objective: LO-Module E-3

51) The first unit of a product took 832 hours to build, and the learning rate is 90%. How long will it take to make the 25th unit? (Use at least three decimals in the exponent if you use the logarithmic approach.)

A) time ≤ 500 hours

B) 500 < time ≤ 525

C) 525 < time ≤ 530

D) 530 < time ≤ 550

E) time > 550

Diff: 2

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-3

52) The first unit of a product took 50 hours to build, and the learning rate is 80%. How long will it take to make the third unit? (Use at least three decimals in the exponent if you use the logarithmic approach.)

A) under 30 hours

B) about 32 hours

C) about 35 hours

D) about 50 hours

E) about 75 hours

Diff: 2

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-3

53) The first unit of a product took 50 hours to build, and the learning rate is 85%. How long will it take to make the 10th unit? (Use at least three decimals in the exponent if you use the logarithmic approach.)

A) less than 24 hours

B) from 25 to 30 hours

C) from 30 to 35 hours

D) from 35 to 40 hours

E) more than 40 hours

Diff: 2

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-3

54) The first unit of a product took 1,000 hours to build and the learning curve is 85%. How long will it take to make the first 5 units? (Use Table E.3)

A) less than 4,005 hours

B) from 4,005 to 4,015 hours

C) from 4,015 to 4,025 hours

D) from 4,025 to 4,035 hours

E) from 4,035 to 4,045 hours

Diff: 2

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-3

55) The first unit of a product took 900 hours to build and the learning curve is 90%. How long will it take to make the first 3 units? (Use Table E.3)

A) less than or equal to 2,470 hours

B) from 2,470 to 2,472 hours

C) from 2,472 to 2,475 hours

D) from 2,475 to 2,478 hours

E) from 2,478 to 2,481 hours

Diff: 2

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-3

56) The first unit of a product took 80 work days. The learning rate is estimated to be 90%. The time for the fourth unit will be about __________ work days and the time for the first four units will be about __________ work days. (Use Table E.3)

A) 51; 250

B) 250; 51

C) 65; 285

D) 51; cannot be determined

E) 65; cannot be determined

Diff: 2

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-3

57) A defense contractor has just started producing turbines for a new government contract. The first turbine took 7000 hours to produce. If the learning curve is 90%, how long will it take to produce the 10th turbine? (Use at least three decimals in the exponent if you use the logarithmic approach.)

A) less than 4800 hours

B) from 4800 to 4900 hours

C) from 4900 to 5000 hours

D) from 5000 to 5100 hours

E) over 5100 hours

Diff: 2

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-3

58) A defense contractor has just started producing engines for a new government contract. The first engine took 800 hours to produce. If the learning rate is 80%, how long will it take to produce the first 20 engines? (Use at least three decimals in the exponent if you use the logarithmic approach, or use Table E.3 cumulative coefficient)

A) less than or equal to 1000 hours

B) from 1000 to 8000 hours

C) from 8000 to 8500 hours

D) from 8500 to 10000 hours

E) 10,000 or more hours

Diff: 2

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-3

59) It took 60 hours to make the first unit of a product. After the second and third units were made, the learning rate was estimated to be 80%. At $10 per hour, estimate the labor bill for the fourth unit. (Use at least three decimals in the exponent if you use the logarithmic approach.)

A) $400 or less

B) from $400 to $420

C) from $420 to $440

D) from $1800 to $2000

E) over $2000

Diff: 2

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-3

60) A manager is trying to estimate the appropriate learning curve for a certain job. The manager notes that the first four units had a total time of 30 minutes. Which learning curve would yield approximately this result if the first unit took 9 minutes? (Use Table E.3 cumulative coefficient)

A) 0.70

B) 0.75

C) 0.80

D) 0.85

E) 0.90

Diff: 3

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-2

61) Which one of the following courses of actions would not be taken by a firm wanting to pursue a learning curve steeper than the industry average?

A) following an aggressive pricing policy

B) focusing on continuing cost reduction

C) keeping capacity equal to demand to control costs

D) focusing on productivity improvement

E) building on shared experience

Diff: 2

Topic: Strategic implications of learning curves

Objective: LO-Module E-4

62) Companies pursuing a learning curve strategy must increase

A) employee training

B) costs

C) quality

D) volume

E) all of the above

Diff: 2

Topic: Strategic implications of learning curves

Objective: LO-Module E-4

63) Which of the following is representative of a firm pursuing a learning curve strategy?

A) aggressive pricing policy

B) focus on productivity improvement

C) building on shared experience

D) keeping capacity growing ahead of demand

E) all of the above

Diff: 1

Topic: Strategic implications of learning curves

Objective: LO-Module E-4

64) Which of the following is false regarding learning curves?

A) Learning curves differ from company to company.

B) Learning curves can always be used for indirect labor.

C) Changes in personnel can change the learning curve.

D) The learning curve may spike for a short time even if it is going to drop in the long run.

E) All of the above are false.

Diff: 2

Topic: Limitations of learning curves

Objective: no LO

65) Which of the following is a limitation of the use of learning curves?

A) Change in personnel, design, or procedure leave the learning curve unchanged.

B) Learning curves are applicable to services as well as to manufacturing.

C) The culture of the workplace may alter the learning curve.

D) Direct labor and indirect labor follow the same learning curves.

E) Applications of learning curves are of tactical, not strategic, importance.

Diff: 1

Topic: Limitations of learning curves

Objective: no LO

66) Which of the following is not a limitation of the use of learning curves?

A) Any change in personnel, design, or procedure can alter the learning curve.

B) Time measurements on early units completed must be accurate.

C) The culture of the workplace may alter the learning curve.

D) Direct labor and indirect labor may not follow the same learning curves.

E) All of these are limitations of learning curves.

Diff: 1

Topic: Limitations of learning curves

Objective: no LO

67) The earliest industrial application of learning curves came from a report by __________.

Diff: 1

Topic: What is a learning curve?

Objective: LO-Module E-1

68) __________ are based on the premise that people and organizations get better at their tasks as the tasks are repeated.

Diff: 1

Topic: What is a learning curve?

Objective: LO-Module E-1

69) If the learning rate for a process is 80 percent, that same process has a 20 percent __________.

Diff: 2

Topic: Learning curves in services and manufacturing

Objective: no LO

70) Failure to consider the effects of learning can lead to __________ of labor needs.

Diff: 2

Topic: Learning curves in services and manufacturing

Objective: LO-Module E-2

71) The __________ is the simplest approach to learning curve problems.

Diff: 2

Topic: Applying the learning curve

Objective: LO-Module E-2

72) To use the table of learning curve coefficients, you must specify __________ and __________.

Diff: 2

Topic: Applying the learning curve

Objective: LO-Module E-3

73) When learning curves are plotted on __________ scales, the "curves" become straight lines.

Diff: 1

Topic: Strategic implications of learning curves

Objective: LO-Module E-4

74) Describe the earliest application of learning curve concepts to industry.

Diff: 1

Topic: What is a learning curve?

Objective: LO-Module E-1

75) In addition to labor, to which other variables have learning curves been applied?

Diff: 1

Topic: What is a learning curve?

Objective: LO-Module E-1

76) What is the basic premise underlying the learning curve?

Diff: 1

Topic: What is a learning curve?

Objective: LO-Module E-1

77) Why do different organizations have different learning curves?

Diff: 2

Topic: Learning curves in services and manufacturing

Objective: no LO

78) When comparing a 70% learning curve versus a 90% learning curve, which one results in a more rapid reduction in labor requirements? Why?

Diff: 2

Topic: Learning curves in services and manufacturing

Objective: no LO

79) What problems in scheduling can arise if adjustments for learning curve effects in operations are not made?

Diff: 2

Topic: Learning curves in services and manufacturing

Objective: no LO

80) "By tradition, learning rates are defined in terms of the complements of their improvement rates." Explain.

Diff: 2

Topic: Learning curves in services and manufacturing

Objective: no LO

81) Two manufacturers have very different learning rates; one is under 70% while the other is over 80%. What factors might lead to such a gap?

Diff: 2

Topic: Learning curves in services and manufacturing

Objective: no LO

82) Explain how learning curves might be applied in a scheduling application.

Diff: 1

Topic: What is a learning curve?

AACSB: Reflective Thinking

Objective: LO-Module E-1

83) Explain how learning curves might be applied in a bid preparation application.

Diff: 1

Topic: What is a learning curve?

AACSB: Reflective Thinking

Objective: LO-Module E-1

84) Identify one advantage and one disadvantage of the arithmetic approach over the logarithmic approach to learning curve calculations.

Diff: 2

Topic: Applying the learning curve

Objective: LO-Module E-3

85) What cautions are in order when using learning curves?

1. Estimates for each organization should be developed rather than applying someone else's.

2. When current information becomes available, reevaluation is appropriate.

3. Any change in personnel, design, or procedure can be expected to alter the learning curve.

4. Learning curves do not always apply to indirect labor and materials.

5. The culture of the work place, as well as resource availability and changes in the process, may alter the learning curve.

Diff: 2

Topic: Limitations of learning curves

Objective: no LO

86) What can cause a learning curve to vary from a smooth downward slope?

Diff: 2

Topic: Limitations of learning curves

Objective: no LO

87) In the logarithmic approach to learning curve calculations, you have used the formula TN = T1 . (Nb). For a problem with a 92 percent learning rate, what is b?

b = = = = -1.12029

Diff: 2

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-3

88) In the logarithmic approach to learning curve calculations, you have used the formula TN = T1 . (Nb). Your manager shows you a problem for which b is specified as -.18442. What learning rate does that value represent?

is:

b = = = = -.18442

Diff: 2

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-3

89) In the Learning-Curve Coefficients table for 70 percent learning, the sixth unit has a unit time value of 0.398. Verify that table entry by use of the logarithmic formula. Use five decimals in your work.

Diff: 2

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-3

90) The Learning-Curve Coefficients table reports that for 70 percent learning, the eighth unit has a unit time value of 0.343. Verify that table entry by use of the arithmetic method.

Diff: 1

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-2

91) Your firm has a contract to make 20 specialty lenses for night vision equipment. The first one took 40 hours. Learning is expected at the 85% rate. How long will it take to finish all 20 units?

Diff: 2

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-3

92) Your firm has expertise with a special type of hand-finished furniture. The learning rate is known to be 82%. If the first piece of furniture took 6 hours, use the logarithmic approach to determine how long it will take to do the third unit.

Diff: 2

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-3

93) Your firm has expertise with a special type of hand-finished furniture. The learning rate is known to be 82%. If the first piece of furniture took 6 hours, estimate how long it will take to complete the third unit.

Diff: 2

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-2

94) The first unit took 79 hours; the tenth took 46 hours. What learning rate is implied by the data?

Diff: 2

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-2

95) Your firm has expertise with a special type of hand-finished furniture. The learning rate is known to be 82%. If the first piece of furniture took 6 hours, how long will it take to do the second? How long will it take to do the fourth?

Diff: 2

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-2

96) You are about to undertake manufacture of a labor-intensive electronics component. The first unit took 300 hours. You are not sure whether the learning rate is 70% or 80%. The initial phase of the contract calls for 6 of these components.

a. How much time will it take to complete all six at 70% learning?

b. How much time will it take to complete all six at 80% learning?

Diff: 2

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-3

97) A certain product under development took 200 hours for the production of its 2nd unit and 180 hours for its 4th unit.

a. What is the learning rate?

b. How much time did the first unit take?

c. How much time would the production of the 10th unit take? (Use both the logarithmic and the Table E.3 approach. Do the two versions agree?)

Diff: 2

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-3

98) A contractor builds large ships for the Department of Defense. A recent contract called for 12 amphibious landing platforms. It was originally estimated that the first of these would cost $1 billion and that 80 percent learning would be appropriate. In fact, the first ship cost $1.6 billion and the second $1.12 billion. What is the revised learning rate? What will be the total cost of the twelve ships? Is it higher or lower than the original estimates? If the defense department cuts the contract from 12 ships to 9, what happens to the average cost per ship?

Diff: 2

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-3

99) A small manufacturer that offers "hand crafted" furniture has developed a new style of desk that they believe will be very successful in the marketplace. It is expected that the first desk will take about 60 hours of craftsmen's time to complete. They expect a 90% learning curve for this desk.

How long will it take to make the 20th desk? The firm is considering accepting an order for 25 desks. How many hours of labor will this require for all 25?

Diff: 2

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-3

100) Your company is making experimental turbochargers for a new design of high-powered farm tractors. The production schedule for these new components is contained in the table below.

The first turbocharger, a trial unit, took 900 hours to produce. Based on your experience with similar products, the learning factor is 85%. You have 20 employees, and each employee works 160 hours per month. How many hours will be required in each month? In which month(s) will overtime be required to meet the production schedule?

Diff: 3

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-3

101) Sally suspects strongly that there is a learning curve associated with solving problems assigned for operations management. She notes that it took her approximately 33 minutes to solve the first problem and 20 minutes to solve the fifth problem.

a. Estimate Sally's learning percentage.

b. Using your answer from part a, estimate how much longer it will take Sally to finish the three problems that remain.

Diff: 2

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-3

102) Joe's Manufacturing is considering bidding on a small order for 5 units. Based on similar products that they have made in the past, they believe that the first unit will take 500 labor hours. They also believe that there will be an 80% learning rate. How many hours of labor should Joe include for his bid?

Diff: 2

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-3

103) A company is preparing a bid on a government contract for 40 units of a certain product. The operations manager estimates the assembly time required for the first two units to be 10.4 hours and 8.3 hours, respectively.

a. What is the appropriate learning curve?

b. What is the average time per unit for the 40 units?

c. Which unit, if any, will require approximately one-half the time of the first unit?

Diff: 2

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-3

104) A small manufacturer builds wooden pleasure boats in a craftsman manner by traditional labor-intensive methods. The first boat is estimated to take 650 hours of skilled labor, which cost $40 per hour. They currently have three workers that can work 2,000 hours a year. They assume that there is a 90% learning rate. How many boats can they make in their first year?

Diff: 2

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-3

105) You are a cost accountant for a firm that specializes in "small" (under 10 billion dollars) defense contracts for specialty electronics products, such as fully portable, miniaturized CD-ROM imaging stations and global positioning transmitters/transponders. Your company is well respected in this field. One project up for competitive bids is a Field Service, Hands-Free, Individual Multi-Protocol Secure Communicator (a battlefield version of a cellular telephone, but built into each soldier's helmet, and containing necessary encryption technology). The Department of Defense wants 8 of these experimental devices to test their practicality. You have reviewed the contract specifications, and estimated that the first FSHFIMPSC should require 2350 hours, and that the product is subject to a 75% learning rate. All costs of the project (machine purchase, machine time, direct and indirect labor, and materials) have been bundled (allocated) into an hourly labor rate of $172 per hour. Determine the total project cost using the provided data.

Diff: 2

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-3

106) A metal works fabricator is about to release a new model of his firm's copper sculpture and fountain. The operations manager estimates that this product is subject to a 90 percent learning rate on labor only–the material bill is not affected by experience. The firm prices its work based on cost–the sum of materials plus 30 percent and labor plus 50 percent. (This allows the firm to practice a little "demand management" for its very popular works.) The first item has already been finished; the material bill was $800 and labor totaled 40 hours. The firm pays its metalworking artisans an average of $18 per hour. What should be the asking price of the first unit? The second?

Diff: 2

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-2

107) Using the arithmetic concept determine how long it will take to make the 64th unit of a product if it took 1 hour to complete the first product with a 50% learning rate.

Thus the time gets halved 6 times (2,4,8,16,32,64). This results in a time of 1*2^-6 = .0156 hours

Diff: 1

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-2

108) A product was priced assuming an 80% learning rate. How much extra labor (in %) will be required on the 4th product if the learning rate is actually 90%?

.81/.64 = 1.27 => 27% more labor will be required

Diff: 2

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-3

109) A product was priced assuming an 80% learning rate. How much extra labor (in $) will be required on the 4th product if the learning rate is actually 90%? Assume that labor costs $10/hour and the first unit cost $100 to produce.

.81-.64 =.17 => 17% of the original cost more => $17

Diff: 2

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-3

110) The fourth unit of production took 80 minutes while the ninth unit of production took 50 minutes. How long did the first unit take?

b= -.5796

T(1)=80/(4^-.5796) = 178.7 minutes

Diff: 2

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-3

111) The seventh unit of production took 63.423 minutes while the ninth unit of production took 59.8 minutes. What is the improvement rate?

b= -.234

-.234= log (1-IR)/log (2)

Log (1-IR) = -.070441

IR=15%

Note: Students may also recognize this b value from Table E.2 as an 85% learning rate and then convert that into an improvement rate.

Diff: 2

Topic: Applying the learning curve

AACSB: Analytic Skills

Objective: LO-Module E-3