Section A

AeroSpace Inc. is manufacturing a new satellite component. The first unit took 100 hours to produce. The company experiences an 80% learning curve.

What is the cumulative average time per unit to produce the first 4 units?

Answer options:

80 hours

64 hours

51.2 hours

256 hours

How to approach this question

Apply the doubling rule: Every time cumulative output doubles, the cumulative average time per unit is multiplied by the learning rate.

Full Answer

B.64 hours✓ Correct

Using the tabular method (doubling rule): 1 unit: Cumulative average time = 100 hours 2 units (doubled): Cumulative average time = 100 * 0.80 = 80 hours 4 units (doubled again): Cumulative average time = 80 * 0.80 = 64 hours.

Common mistakes

Calculating the total time instead of the cumulative average time, or applying the 80% to the total time.

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