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Problem 8 (20 points) BigPowerCo announced the availability of its new generator in 2015. DesertCity, starting a new community in the desert, purchased the first
Problem 8 (20 points) BigPowerCo announced the availability of its new generator in 2015. DesertCity, starting a new community in the desert, purchased the first eight generators in 2016 for 80 million AED. They wish to buy 16 more in 2018. You are the cost engineer and know that a learning curve of 90% is reasonable for complex electronic products. Your procurement department asks you to help in negotiations. a) Procurement wants to know what will be a fair price for the second purchase. Assume 2% inflation per year. (15 points) b) What will BigPowerCo argue based on your learning curve analysis? List two reasons. (5 points)
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