21. CSO: 1A2b LOS: 1A2e
A manufacturing company has the opportunity to submit a bid for 20 units of a product
on which it has already produced two 10-unit lots. The production manager believes that
the learning experience observed on the first two lots will continue for at least the next
two lots. The direct labor required on the first two lots was as follows.
• 5,000 direct labor hours for the first lot of 10 units
• 3,000 additional direct labor hours for the second lot of 10 units
The learning rate experienced by the company on the first two lots of this product is
a. 40.0%.
b. 60.0%.
c. 62.5%.
d. 80.0%.
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