A Company Is Preparing a Bid on a Government Contract

question 105

Essay

A company is preparing a bid on a government contract for 20 units of a certain product. The operations manager estimates the assembly time required for the first two units to be 9.4 hours and 8.1 hours, respectively.
a. What is the appropriate learning curve?
b. What is the total time per unit for the 20 units?
b. What is the average time per unit for the 20 units?

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Definitions:

Risk-free Rate

The hypothetical yield of a risk-free investment, commonly signified by the interest rate on government bonds.

Cumulative Return

Cumulative return is the aggregate amount of money gained or lost by an investment over a set period, typically expressed as a percentage.

Initial Margin

The portion of the purchase price that an investor must deposit when buying securities on margin; serves as a down payment on the investment.

Maintenance Margin

The minimum amount of equity that must be maintained in a margin account after a purchase has been made, to keep the account open.