Question #1

Question #2

Honda Motor Company has discovered a problem in the exhaust system of one of its automobile lines and has voluntarily agreed to make the necessary modifications to conform to government safety requirements. Standard procedure is for the firm to pay a flat fee to dealers for each modification completed. Honda is trying to establish a fair amount of compensation to pay dealers and has decided to choose a number of randomly selected mechanics and observe their performance and learning rate. Based on the results of this test, Honda decided to pay a $60 fee for each repair ( 3 hours $20 per flat-rate hour). Southwest Honda, Inc., is considering whether to participate in the program. If they can average three hours or less on each repair (what Honda is willing to pay them for), it will make sense for them to agree. They performed their own test repairs to help in their decision process. Six mechanics, working independently, have completed two modifications each. On average, the mechanics took 7 hours to do the first unit and 6.65 hours to do the second. The dealership expects to perform 300 such modifications, which works out to 50 modifications per mechanic, including the first two units already built. Use Exhibit 6.5. On average, how many hours will it take Southwest Honda to perform each modification using all six mechanics as planned? (Round your answer to 1 decimal place.) Lazer Technologies Inc. (LTI) has produced a total of 20 high-power laser systems that could be used to destroy any approaching enemy missiles or aircraft. The 20 units have been produced, funded in part as private research within the research and development arm of LTI, but the bulk of the funding came from a contract with the U.S. Department of Defense (DoD). 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 LTI to submit a bid for 100 more 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: Use Exhibit 6.4 and Exhibit 6.5. a. Based on past experience, what is the learning rate? (Do not round intermediate calculations. Round your answer to the nearest whole percent.) b. What cost should LTI use in their bid for the total order of 100 additional units, assuming that learning continues? (Use your rounded learning rate from Part a. Enter your answer in millions of dollars rounded to one decimal place.) c. What is the cost expected to be for the last unit under the learning rate you estimated? (Use your rounded learning rate from Part a. Enter your answer in millions of dollars rounded to one decimal place.)