if 500 labor hours were required to produce the first unit h

if 500 labor hours were required to produce the first unit, how many will be required for the 7th unit if a 95% learning curve is in effect?

Solution

Learning curve

Time required for the nth unit is calculated by the following formula

Tn = T1*r^{(LN(n)/LN(2))} , where r is the learning rate, LN() is natural logarithm.

Hours required for the 7th unit, T7 = T1*r^{(LN(7)/LN(2))}

= 500*0.95^2.807

= 432.94 hours

~ 433 hours