The objective of this exercise is to estimate labor costs incurred to build 16 SPH2 solar-powered helicopters. Your company built the SPH2 prototype because of its experience building an earlier version (SPH1). Building the prototype (unit 1) of the SPH2 required 4,000 hours. The average labor cost per hour is $100. With your highly skilled labor force, the 4,000 direct labor hours incurred for the prototype should not be assumed for each of the next fifteen SPH2 solar-powered helicopters because of anticipated learning effects. Assume that the sixteen SPH2 solar-powered helicopters can be built with the same amount of learning that occurred in the production of the sixteen SPH1 solar-powered helicopters, the earlier version of the SPH2. The direct labor hours for each of the sixteen SPH1 solar-powered helicopters are listed below: Model SPH1 Unit # labor hours 1 3,900 2 2,740 3 2,660 4 1,980 5 2,320 6 2,000 7 1,900 8 1,700 9 1,950 10 1,950 11 1,760 12 1,540 13 1,680 14 1,320 15 1,500 16 1,100 Required: 1. Plot the learning curve for SPH1 using scattergraph. 2. Repeat the estimation of the learning curve using regression Raw Data Needed Cumulative Units Individual Unit Time of Last Unit 1 3,900 2 2,740 3 2,660 4 1,980 5 2,320 6 2,000 7 1,900 8 1,700 9 1,950 10 1,950 11 1,760 12 1,540 13 1,680 14 1,320 15 1,500 16 1,100 1-2 70% 2-4 72% 4-8 86% 8-16 65% x (independent variable) y (dependent variable) Incremental method ln(cumulative units) ln(indiv unit time) y=aXb ln(y)=ln(aXb) ln(y)=ln(a) + ln(Xb) ln(y)=ln(a) + b*ln(X) y = Individual Unit Time of Last Unit OR Cumulative Average Time (see below) X = Cumulative Units a = time to produce the first unit b = learning rate parameter = ln(learning %) / ln(2) Raw Data Needed Cumulative Units Individual Unit Time of Last Unit 17 977 18 857 19 737 20 616 21 496 22 376 23 255 24 135 25 15 26 -106 27 -226 28 -346 29 -467 30 -587 31 -707 32 -828 1-3 88% 2-5 72% 4-9 22% 8-17 -613% y=aXb ln(y)=ln(aXb) ln(y)=ln(a) + ln(Xb) ln(y)=ln(a) + b*ln(X) y = Individual Unit Time of Last Unit OR Cumulative Average Time (see below) X = Cumulative Units a = time to produce the first unit b = learning rate parameter = ln(learning %) / ln(2)