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Below is the start analysis of Andrew's firm's possible work on a video training CD. This analysis is supposed to support a bidding to obtain
Below is the start analysis of Andrew's firm's possible work on a video training CD. This analysis is supposed to support a bidding to obtain this project. Bid too high and the firm will risk loosing the work to anther company. Bid too low and the firm risks loosing money or not making enough profit to make the project worth doing. Initial tests showed that the firm had a learning rate of 78% meaning that each time they completed a chapter, they learned how to go faster on the next. The chart shows the estimated time to completion for each chapter along with what it will cost the firm to produce each chapter. Learning Rate 78% Hourly Rate $65 $3,350 Chapter # Unit Time 1 21 2 16.4 3 14.2 4 12.8 5 11.8 6 11.0 7 10.5 8 10.0 9 9.6 10 9.2 11 8.9 12 8.6 13 8.4 Cumulative Chapter Cumulative Time Cost Cost 21 $1,365 $1,365 37.4 $1,065 $2,430 51.5 $921 64.3 $830 $4,181 76.1 $767 $4,947 87.2 $718 $5,666 97.6 $680 $6,345 107.6 $648 $6,993 117.1 $621 126.3 $598 $8,212 135.2 $578 $8,790 143.8 $560 $9,350 152.2 $544 $9,894 160.4 $530 $10,424 168.3 $517 $10 941 $7,614 Time left 1:06:09 Learning Rate 78% Hourly Rate $65 F Chapter # Unit Time 1 21 2. 16.4 3 14.2 4 12.8 5 11.8 6 11.0 7 10.5 8 10.0 9.6 10 9.2 11 8.9 12 8.6 13 8.4 14 8.2 15 8.0 16 7.8 17 7.6 18 7.5 Cumulative Chapter Cumulative Time Cost Cost 21 $1,365 $1,365 37.4 $1,065 $2,430 51.5 $921 $3,350 64.3 $830 $4,181 76.1 $767 $4,947 87.2 $718 $5,666 97.6 $680 $6,345 107.6 $648 $6,993 117.1 $621 $7,614 126.3 $598 $8,212 135.2 $578 $8,790 143.8 $560 $9,350 152.2 $544 $9,894 160.4 $530 $10,424 168.3 $517 $10,941 176.1 $505 $11,447 183.7 $494 $11,941 191.2 $484 $12,425 Markup: 10% Bid: $13,668 Markup: 10% Bid: $13,668 Andrew's firm typically charges a 10% markup over costs so that they realize a 10% profit. This means that they will make $1,243 on a project that will cost them $12,425. Looking at the cost of each chapter, at what chapter will the firm reach a point where the learning rate allows them to earn more for that chapter based on what they bid than that chapter costs them? Select one: a. Chapter 2 b. Chapter 2 Oc. Chapter 3 O d. Chapter 4 e. Chapter 5 Of. Chapter 6 g. Chapter 7 h. Chapter 8 Time left 1:05:26
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