1. What are some of the limitations of learning curves?
2. Identify three applications of the learning curve.
3. What are the approaches to solving learning-curve problems?
4. Refer to Example E2. What are the implications for Great Lakes, Inc., if the engineering department wants to change the engine in the third and subsequent tugboats that the firm purchases?
Example
USING LEARNING-CURVE COEFFICIENTS
It took a Korean shipyard 125,000 labor-hours to produce the first of several tugboats that you expect to purchase for your shipping company, Great Lakes, Inc. Boats 2 and 3 have been produced by the Koreans with a learning factor of 85%. At $40 per hour, what should you, as purchasing agent, expect to pay for the fourth unit?