A staff assistant at Cornwall Corporation recently determined that the first four units completed in a new manufacturing process took 800 hours to complete, or an average of 200 hours per unit. The assistant also found that when the cumulative output produced doubles, the average labour time declines by 20%. On the basis of this information, how many total hours would Cornwall use if it produces 16 units?
A)128.
B)160.
C)1,280.
D)2,048.
E)2,880.

Question

Quizplus · Accepted Answer

The learning curve effect indicates that when output doubles, the average time per unit decreases by 20%. Starting with 200 hours per unit for 4 units, the average time for 8 units is 160 hours, and for 16 units, it is 128 hours. Total hours for 16 units = 16 units * 128 hours/unit = 2,048 hours.

A Staff Assistant at Cornwall Corporation Recently Determined That the First