Lazer Technologies Incorporated (LTI) has produced a total of 20 high-power laser systems that could be used to destroy any approaching enemy missiles or aircraft. The 20 units have been produced, funded in part as private research within the research and development arm of LTI, but the bulk of the funding came from a contract with the U.S. Department of Defense (DoD). Testing of the laser units has shown that they are effective defense weapons, and if redesigned to add portability and easier field maintenance, the units could be truck-mounted. The DoD has asked LTI to submit a bid for 100 units. The 20 units that LTI has built so far cost the following amounts and are listed in the order in which they were produced: Use Exhibit 6.4 and Exhibit 6.5. UNIT COST ($ UNIT COST ($ NUMBERMILLIONS) NUMBERMILLIONS) 1 2 3 4 5 6 7 8 9 10 $12.0 11 9.4 12 8.4 13 7.5 14 7.1 15 6.7 16 6.4 17 5.9 5.7 Learning rate 19 20 Cost for total order $5.5 5.4 5.2 5.1 5.0 a. Based on past experience, what is the learning rate? Note: Do not round intermediate calculations. Round your answer to the nearest whole percent. 5.0 4.8 4.7 4.6 4.6 Expected cost for last unit b. What bid should LTI submit for the total order of 100 units, assuming that learning continues? Note: Use your rounded learning rate from Part a. Enter your answer in millions of dollars rounded to one decimal place. % million dollars c. What is the cost expected to be for the last unit under the learning rate you estimated? Note: Use your rounded learning rate from Part a. Enter your answer in millions of dollars rounded to one decimal place. million dollars
Lazer Technologies Incorporated (LTI) has produced a total of 20 high-power laser systems that could be used to destroy any approaching enemy missiles or aircraft. The 20 units have been produced, funded in part as private research within the research and development arm of LTI, but the bulk of the funding came from a contract with the U.S. Department of Defense (DoD). Testing of the laser units has shown that they are effective defense weapons, and if redesigned to add portability and easier field maintenance, the units could be truck-mounted. The DoD has asked LTI to submit a bid for 100 units. The 20 units that LTI has built so far cost the following amounts and are listed in the order in which they were produced: Use Exhibit 6.4 and Exhibit 6.5. UNIT COST ($ UNIT COST ($ NUMBERMILLIONS) NUMBERMILLIONS) 1 2 3 4 5 6 7 8 9 10 $12.0 11 9.4 12 8.4 13 7.5 14 7.1 15 6.7 16 6.4 17 5.9 5.7 Learning rate 19 20 Cost for total order $5.5 5.4 5.2 5.1 5.0 a. Based on past experience, what is the learning rate? Note: Do not round intermediate calculations. Round your answer to the nearest whole percent. 5.0 4.8 4.7 4.6 4.6 Expected cost for last unit b. What bid should LTI submit for the total order of 100 units, assuming that learning continues? Note: Use your rounded learning rate from Part a. Enter your answer in millions of dollars rounded to one decimal place. % million dollars c. What is the cost expected to be for the last unit under the learning rate you estimated? Note: Use your rounded learning rate from Part a. Enter your answer in millions of dollars rounded to one decimal place. million dollars
Purchasing and Supply Chain Management
6th Edition
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
ChapterC: Cases
Section: Chapter Questions
Problem 5.3SD: Scenario 4 Sharon Gillespie, a new buyer at Visionex, Inc., was reviewing quotations for a tooling...
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Transcribed Image Text:Problem 6-6 (Algo)
Lazer Technologies Incorporated (LTI) has produced a total of 20 high-power laser systems that could be used to
destroy any approaching enemy missiles or aircraft. The 20 units have been produced, funded in part as private
research within the research and development arm of LTI, but the bulk of the funding came from a contract with the U.S.
Department of Defense (DoD).
Testing of the laser units has shown that they are effective defense weapons, and if redesigned to add portability and
easier field maintenance, the units could be truck-mounted.
The DoD has asked LTI to submit a bid for 100 units.
The 20 units that LTI has built so far cost the following amounts and are listed in the order in which they were produced:
Use Exhibit 6.4 and Exhibit 6.5.
UNIT COST ($ UNIT COST ($
NUMBERMILLIONS) NUMBERMILLIONS)
1
2
3
4
5
6
7
8
9
10
$12.0
9.4
8.4
7.5
7.1
6.7
6.4
6.2
11
12
13
14
15
16
17
18
5.9
19
5.7 20
Learning rate
a. Based on past experience, what is the learning rate?
Note: Do not round intermediate calculations. Round your answer to the nearest whole percent.
$5.5
5.4
Cost for total order
5.2
5.1
5.0
5.0
4.8
4.7
4.6
4.6
b. What bid should LTI submit for the total order of 100 units, assuming that learning continues?
Note: Use your rounded learning rate from Part a. Enter your answer in millions of dollars rounded to one
decimal place.
Expected cost for last
unit
%
million
dollars
c. What is the cost expected to be for the last unit under the learning rate you estimated?
Note: Use your rounded learning rate from Part a. Enter your answer in millions of dollars rounded to one
decimal place.
million
dollars
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