Scribd
Upload
189 views4 pages

More Solved Problems

The document contains 7 solved problems related to learning curves, cost estimation techniques, and calculating estimated costs using cost indices. Specifically: 1) It estimates the hours required to complete the 38th unit of production based on a learning rate of 80% and the time taken for the first unit. 2) It calculates the time needed to assemble the 8th unit and the total time for the first 6 units with a learning rate of 75%. 3) Using a cost index, it estimates the cost of a replacement pump in 2010 given the cost in 2002 and the change in the index value. 4) It estimates the cost of a new shipping hub using a cost index, the previous hub's cost

Uploaded by

Roqaia Alwan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
189 views4 pages

More Solved Problems

The document contains 7 solved problems related to learning curves, cost estimation techniques, and calculating estimated costs using cost indices. Specifically: 1) It estimates the hours required to complete the 38th unit of production based on a learning rate of 80% and the time taken for the first unit. 2) It calculates the time needed to assemble the 8th unit and the total time for the first 6 units with a learning rate of 75%. 3) Using a cost index, it estimates the cost of a replacement pump in 2010 given the cost in 2002 and the change in the index value. 4) It estimates the cost of a new shipping hub using a cost index, the previous hub's cost

Uploaded by

Roqaia Alwan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 4

MEPM 521 / Fall 2018

Solved Problem

Learning Curve

Problem 1

The ABC Company has just been given a production schedule for ski-lift gondola cars. This product is
considerably different from any others the company has produced. Historically, the company‘s learning
rate has been 80% on large projects. The first unit took 1,000 hours to produce.

Estimate how many hours would be required to complete the 38th unit.

Solution

We use the learning curve formulas to calculate the time required for the 38th unit:

Given: L=0.80 a= 1000 hrs X =38th unit.

(Ln L /Ln 2)
Y38 = α X
(Ln 0.80/ Ln 2)
Y38 = 1000 x 38 = 310.02
hrs hrs
Problem 2

Assume the first unit of production required 3 hours time for assembly. The learning rate is 75%. Find
(a) the time to assemble the 8th unit, and (b) the time needed to assemble the first 6 units.

Solution

a) r
Y=αX
(Ln 0.75/ Ln 2)
Y8 = 3 x 8 = 1.27 hrs
b)
Estimation Techniques

Problem 3

In 2002 Acme Chemical purchased a large pump for $112,000. Acme keys their cost estimating for these
pumps to the industrial pump index, with a baseline of 100 established in 1992. The index in 2002 was
212. Acme is now (2010) considering construction of a new addition and must estimate the cost of the
same type and size of pump. If the industrial pump index is currently 286, what is the estimated cost of
the new pump?

Solution

Cost of the new pump:

Problem 4

Acme Logistics provides “less than truck load” (LTL) services throughout the U.S. They have several hubs
where they use cross-docking to move goods from one trailer to another. Acme built its last hub 10
years ago, and it had 36 dock doors. The cost index at that time was 140, and the total cost was $6
million. Acme plans a new hub that will have 48 dock doors. The cost index now is 195, and Acme will
use a capacity factor of 0.82. What is the estimated cost of the new hub?

Solution
Problem 5
A water filtration system in an industrial process was purchased in 2014 for $250,000. It will be replaced at the end
of year 2019. What is the estimated cost of the replacement, based on the following equipment cost index?

Year Index Year Index


2014 220 2017 257
2015 238 2018 279
2016 247 2019 298

Solution

=250,000 (298/220)= $ 338,636.4

Problem 6
In 2002 Acme Chemical purchased a large pump for $112.000. Acme keys their cost estimating for these
pumps to the industrial pump index, with a baseline of 100 established in 1992. The index in 2002 was 212.
Acme is now (2010) considering construction of a new addition and must estimate the cost of the same type
and size of pump. If the industrial pump index is currently 286, what is the estimated cost of the new
pump?

Solution

=112,000 (286/212)= $ 151,049


Problem 7

You might also like