Questions -

Q1. Mass Balance Company is manufacturing a new digital scale for use by a large chemical company. The order is for 40 units. The first scale took 60 hours of direct labor. The second unit took 48 hours to complete.

a) What is the learning rate?

b) What is the estimated time for the 40th unit?

c) What is the estimated total time for producing all 40 units?

d) What is the average time per unit for producing the last 10 units (#30 - #40)?

Q2. Freddie and Jason have just opened the Texas Toothpick, a chain-saw sharpening and repair service located on Elm Street. The Texas Toothpick promises same-week repair service. Freddie and Jason are concerned that a projected increase in demand as the end of October nears will cause service to deteriorate. Freddie and Jason have difficulty attracting employees, so they are the only workers available to complete the work. Safety concerns require that the each work no more than 40 hours per week. The first chain-saw sharpening and repair required 7 hours of work, and an 80 percent learning curve is anticipated.

a) How many total hours are required to complete 64 chain saws?

b) How many hours of work are required for the week ending on Friday the 13th?

c) Will Freddie and Jason be able to keep their same-week service promise during their busiest week just before Halloween?

Q3. The Hand-To-Mouth Company (HTM) has $200,000 in cash, no inventory, and a 90 percent learning curve. To reduce complexity of this problem, ignore hiring and training costs associated with dramatically increased production. Employees are paid $20 per hour every Friday for that week's work. HTM has received an order to build 1,000 desks over the next 15 weeks. Materials cost $400 per desk. Suppliers make deliveries each Monday and insist on cash upon delivery. The first desk takes 100 hours of direct labor to build. HTM will be paid $1,500 per desk two weeks after the desk is delivered. Should HTM take this order?