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SEATTLE, Washington Prior to the pandemic, Boeing gradually increased the monthly production rate of the B-737 from 30 aircraft in 2010 to 40 in 2014
- SEATTLE, Washington Prior to the pandemic, Boeing gradually increased the monthly production rate of the B-737 from 30 aircraft in 2010 to 40 in 2014 and finally to 50 in 2018. In preparation for increased production from 40 to 50 aircraft per month, Boeing introduced an automated wing assembly process that reduced the flow time by more than one-third. Boeing also installed other sophisticated production equipment because the cost of such capital fell relative to the price of labor (lower cost of K, cost of L is unchanged). The isocost/isoquant diagram below shows the capital and labor employed at the production rate of 30 aircraft per month.
a. Complete the isocost/isoquant diagram below; insert appropriate isocost curves and lines showing the optimal capital and labor for production rates of 40 and 50 aircraft per month (use the MS Word drawing tools - INSERT/SHAPE).
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