• You're hired at a local company. Your job is to develop time estimates for customer orders. Suppose a customer placed an order for 30 units of a product. You suggested a bid price of $1,000 per unit in the contract based on an average of 40 hours of direct labour per unit and a total direct labour cost of $18,000. It's estimated that the second unit will take 60 hours of labour, and the fourth unit is expected to take 48 hours. The wage rate is $15 per hour.

1. Find the learning rate, L, and the progress rate, i. How many hours do you expect the assembly of the sixth unit to take? How many hours do you expect the assembly of the 30^th unit to take? Calculate the percentage change in productivity between the 1^st and the 2^nd units; between the 1^st and the 30^th unit. (4)
2. What is the total amount of hours to assemble all 30 units? What is the average time to assemble each of the 30 units? Based on your time estimates, what is the total direct labour cost to assemble the 30 units? Is the contract’s assumption about the average labour hours per unit valid or should the bid price be revised? Why?
3. After you completed the order for the 30 units, another customer has just placed an order for 15 units. How many total labour hours will be needed to satisfy the second customer’s order?
4. Suppose the workers can supply 1,509 labour hours each year to the assembly shop. What is the firm’s annual “capacity” to manufacture the product, that is, how many units can the company manufacture in one year?