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In: Accounting

Condor Airplane Company has built a new model jet aircraft which it intends to sell to...

Condor Airplane Company has built a new model jet aircraft which it intends to sell to high net worth clients. This aircraft required 25,000 hours to complete. Condor believes an incremental unit-time learning model with an 82% learning curve best reflects the company's production efficiency. Condor just received a contract to make fifteen identical aircraft. What will be the expected unit time for the sixteenth aircraft?

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Expert Solution

Ans : As per doubling aproach ,

LCR = Total time taken for 2n units / 2* total time taken for n units

Total time taken for 2n units = LCR * 2 * total time taken for n units

Time taken for 1st unit = 25,000 hours

(i) As per formula Total time taken for 2 aircrafts = 2 * time taken for 1st aircraft * LCR

= 2* 25,000 * 0.82 (given in question )

Total time taken for 2 aircrafts = 41,000 hours

(ii) Total Time taken for 4 aircrafts = 2* total time taken for 2 aircrafts * LCR ( n = 2)

= 2 * 41,000 * 0.82 (from (i) )

= 67,240 hours

(iii) Total time taken for 8 aircrafts = 2* total time taken for 4 aircrafts ( n = 4)

= 2 * 67,240 * 0.82 ( from (ii) )

= 110,273.6 hours

(iv) Total time taken for 16 aircrafts = 2 * total time taken for 8 aircrafts * LCR ( n = 8)

= 2 * 110,273.6 * 0.82 (from (iii) )

= 180,848.704

Expected unit time for sixteenth aircraft = Total time for 16 aircrafts / 16

= 180,848.704 /16

= 11,303.044 hours

ekkarill92 answered 1 year ago
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