Problem 2The labor cost to produce a certain item is $20 per hour. Material cost is $60 per unit. The overhead costis charged as 70% of the labor and materials cost. The learning rate is 80%.a. Determine the average cost for 50 units, given that the first unit took 5 hours to complete.b. Assume the item can be purchased from a vendor for $162 per unit. Should we just buy theneeded 50 units or produce them. Explain.c. What are your answers for a and b if the needed quantity is 100 units? Show all your work

Given- Labor cost = $20Material cost = $60 per unitOverhead cost = 70%Learning rate = 80%

Answered: Problem 2 The labor cost to produce a…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Chapter 10: The Payoff of IDIC: Using Mass Customization to Build Learning Relationships How will Lego practice mass customization? To think about mass customization for Lego, consider: Who are the customer types for Lego? (Think B2B.) Who are the MVCs? The MGCs? The BZs? (See Chapter 5.) What are customers buying when they buy Lego sets? (It’s not “toy building bricks.”) If customers buy packages of Legos to resell, what else do they need? What is their expanded need set? What is the opportunity to lock customers into a Learning Relationship and build share of customer for Lego? Is there any opportunity, ever, at all, for Lego to build Learning Relationships with any end user? How and why?
Indicate whether the items below are used as key performance indicators for the areas Average trainings provided to employees per year (A) Financial(B) Customer(C) Internal Process(D) Learning and Growth performance.
You are setting up a new production line for a new type of delivery drones. You observed that the cost for the 10th unit was $6296.33 and the cost for the 80th unit was $4146.15. a) What is the K for the learning curve model of this production line? b) What is the s for the learning curve model of this production line? c) At which unit does its production cost start to be less than $1500?
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You are trying to forecast the future production cost in your department. You observed that in the last seven months your costs were as follows: Month 1 2 3 4 5 6 7 Cost $1000 900 846 810 783 762 744 Moreover, you discovered that your department has a learning curve of 90% with regard to cutting cost, and improving productivity. (a) Forecast the cost in the 8th month. (b) The planning department has announced that the forecasted cumulative cost of the next planning horizon starting from month 8 will be $4207. What is the length of the next planning horizon? (c) If the forecasting error variance of the last 7 months is 17.5, can you estimate the MAD of the last 7 months? If so, what is its value?
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State the approches to solve learning curve problems?
NUBD Company is planning to introduce a new product with an 80 percent learning rate for production for batches of 1,000 units. The variable labor costs are P30 per unit for the first 1,000-unit batch. Each batch requires 100 hours. There are P10,000 in fixed costs not subject to learning. What is the cumulative total time (labor hours) to produce 16,000 units based on the cumulative average-time learning curve?
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National Company is planning to introduce a new product with an 85 percent learning rate for production for batches of 1,000 units. The variable labor costs are P30 per unit for the first 1,000-unit batch. Each batch requires 100 hours. There are P10,000 in fixed costs not subject to learning. What is the cumulative average time per batch using the incremental unit-time learning curve for 2,000 units?

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