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Johnson Industries got a contract to develop and manufacture four high intensity long distance receiver or transmitters for the cellular telephones. The first took 2000 labour hours, and cost $39000 worth of bought and manufactured parts. The second took 1500 labour hours, and cost $37050 in parts. The 3rd took 1450 labour hours, and $31000 in parts, and the 4th took 1275 labour hours, and cost $31492. Johnson was asked to bid on the follow-on contract for another dozen receivers or transmitter units. Ignoring any forgetting factor effects, what should Johnson approximation time and parts costs to be for dozen units.

(Hint: there’re two learning curves--one for parts, and one for labour).

Operation Management, Management Studies

  • Category:- Operation Management
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