Your boss is the project manager for a large contract assembly plant. A new customer has come to you with a product they want 20 units of assembled. The customer estimates that the time to assemble a unit is about 15 hours to assemble each one and is willing to pay you at that rate. She accepts the terms and offers you the project. You want to impress the boss but you don’t want to take the project if it will lose money and make you look bad. She tells you that the first unit took 25 hours and the second one took 20 hours.

a) What is the learning rate for this project? How many hours do you expect the third unit to take? How many hours do you expect the 20th unit to take? What is the percentage change in productivity from the first unit to the 20th unit?

b) What is the total number of hours required for all 20 units? What is the average time to assemble all of the units? Should you accept the project? Why or why not?

c) After you have finished the project, the company comes back and asks for 20 more units. How long do believe the first unit of the order would take to produce? The 20th? How many labour hours would be required for the second order? What is the labour time per unit?

d) Suppose your company can supply 503 labour hours per month to this product. What is your “capacity” to produce this product (i.e. how many can you produce in the first month)?