As the estimator for Arup Mukherjee Enterprises, your job is to prepare an estimate for a potential customer service contract. The contract is for the service of diesel locomotive cylinder heads. The shop has done some of these in the past on a sporadic basis. The time required to service the first cylinder head in each job has been exactly 4 hours, and similar work has been accomplished at an 85% learning curve. The customer wants you to quote the total time in batches of 12 and 20.
(a) Prepare the quote.
(b) After preparing the quote, you find a labor ticker for this customer for five locomotive cylinder heads. From the notations on the labor ticket, you conclude that the fifth unit took 2.5 hours. What do you conclude about the learning curve and your quote?