Q3:

Company Z is just starting to make a brand-new product they have made before. They have

completed two units so far. The first unit took 12 hours to complete and the next unit took 11

hours. Based only on this information, what would be the estimate of the learning percentage in

this process?

11

Learning percentage =-91.67%

04:

Lazer Technologies Ine. (LTI) has produced a total of 20 high-power laser systems that could be used to destroy any approaching enemy

the research and development arm of LII

Testing of the laser units has shown that they are effective defense weapons, and if redesigned to add portability and easier field

maintenance. the units could be truck-mounted.

The DoD has asked LII to submit a bid for 100 units.

The 20 units that LTI has built so far cost the following amounts and are listed in the order in which they were produced.

Usit Naaber

Lit Nabet

Cost (S uillions)

Cost (S ulions)

SI

11

39

35

30

6

65

2$

55

27

27

5

23

0

36

36

29

26

10

41

a Based on past experience, what is the learning rate?

6 What bid should LII submit for the total order of 100 units, assuming that learning continues?

c What is the cost expected to be for the last unit under the learning rate you estimated?

a.

For units 1 to 2 = 10/12 = 83.33%

For units 2 to 4 = 6.5/10 = 65%

For units 4 to 8 =3.6/6.5 = 55.38%

For units 8 to 16 = 2.7/3.6 = 75%

The average learning rate is = 69.67 Round this to 70%.

120 units = 19.570

b. From Exhibit 6.5

-20 units= 7.407

12.163

Therefore, cost for 100 more units = 12 million (12.163) = $145,956,000. LTI should add the

appropriate profit margin to this expected cost.

From Exhibit 6.4: Cost for 120h unit is $12 million(,0851) = $1,021,200

c.

Q3: Company Z is just starting to make a brand-new product they have made before. They have completed two units so far. The first unit took 12 hours to complete and the next unit took 11 hours. Based only on this information, what would be the estimate of the learning percentage in this process? Learning percentage 11 12 = 91.67% Later Technologies Inc. (L.111 has produced a total of 20 high power laser stems that could be used to destrapproaching missiles at the 20tshave been produced, funded in partas private research in the research and event ofLII. but the tufe of the funding come from a contract with the US Department of Defense (D.D Testing of the laser mits has shown that they are effective defense weapons, and if redesigned to add portable and easier field traintenance, the mis could be track tooted The DoD has asked LTI to bid for 100 units The 20 ans that Lil has beet our cost the following mounts and we listed in the order in which they were produced 11 13 11 10 os 21 ti . 20 Based on past experience what is the learning te What should be for the total order of 100 units, assuming that learning contes What is the cost expected to be for the last unit under the learning rate your estimated For units 1 to 2 = 10/12 = 83.33% For units 2 to 4 = 6.5/10 = 65% For units 4 to 8 = 3.6/6.5 = 55.38% For units 8 to 16 = 2.7/3.6 = 75% The average learning rate is = 69.67 Round this to 70%. b. From Exhibit 6.5 120 units = 19.570 20 units = 7.407 12.163 Therefore, cost for 100 more units = 12 million (12.163) = $145,956,000. LTI should add the appropriate profit margin to this expected cost. From Exhibit 6.4: Cost for 120 unit is $12 million(.0851) = $1,021,200