The Production Schedule for a New Product Follows $$\begin{array} { | c | c | } \hline \text { Month } & \text { No Units } \\\hline 1 & 15 \\2 & 20 \\3 & 40 \\4 & 35 \\\hline\end{array}$$

question 42

Multiple Choice

The production schedule for a new product follows
$$\begin{array} { | c | c | } \hline \text { Month } & \text { No Units } \\\hline 1 & 15 \\2 & 20 \\3 & 40 \\4 & 35 \\\hline\end{array}$$
The first unit took 100 hours to complete, and the rate of learning is 80 percent. Each employee works 40 hours per month. Refer to the copy of Table G.1 below.
Conversion Factors for the Cumulative Average Number of Direct Labor Hours per Unit
$\begin{array}{c}\begin{array}{c}80 \% \text { Learning Rate }\\\text { ( } n=\text { cumulative production) }\\\begin{array}{rrrrrr}\hline n & & n & & {n} & \\\hline 1 & 1.00000 & 19 & 0.53718 & 37 & 0.43976 \\2 & 0.90000 & 20 & 0.52425 & 38 & 0.43634 \\3 & 0.83403 & 21 & 0.51715 & 39 & 0.43304 \\4 & 0.78553 & 22 & 0.51045 & 40 & 0.42984 \\5 & 0.74755 & 23 & 0.50410 & 64 & 0.37382 \\6 & 0.71657 & 24 & 0.49808 & 128 & 0.30269 \\7 & 0.69056 & 25 & 0.49234 & 256 & 0.24405 \\8 & 0.66824 & 26 & 0.48688 & 512 & 0.19622 \\9 & 0.64876 & 27 & 0.48167 & 600 & 0.18661 \\10 & 0.63154 & 28 & 0.47668 & 700 & 0.17771 \\11 & 0.61613 & 29 & 0.47191 & 800 & 0.17034 \\12 & 0.60224 & 30 & 0.46733 & 900 & 0.16408 \\13 & 0.58960 & 31 & 0.46293 & 1,000 & 0.15867 \\14 & 0.57802 & 32 & 0.45871 & 1,200 & 0.14972 \\15 & 0.56737 & 33 & 0.46464 & 1,400 & 0.14254 \\16 & 0.55751 & 34 & 0.45072 & 1,600 & 0.13660 \\17 & 0.54834 & 35 & 0.44694 & 1,800 & 0.13155\\18& 0.53979 & 36 & 0.44329 & 2,000 & 0.12720\end{array}\end{array}\begin{array}{cl}90 \% \text { Learning Rate }\\\text { ( } n=\text { cumulative production) }\\\begin{array}{rrrrrr}\hline n &&{n} & &n & \\\hline 1 & 1.00000 & 19 & 0.73545 & 37 & 0.67091 \\2 & 0.95000 & 20 & 0.73039 & 38 & 0.66839 \\3 & 0.91540 & 21 & 0.72559 & 39 & 0.66595 \\4 & 0.88905 & 22 & 0.72102 & 40 & 0.66357 \\5 & 0.86784 & 23 & 0.71666 & 64 & 0.62043 \\6 & 0.85013 & 24 & 0.71251 & 128 & 0.56069 \\7 & 0.83496 & 25 & 0.70853 & 256 & 0.50586 \\8 & 0.82172 & 26 & 0.70472 & 512 & 0.45594 \\9 & 0.80998 & 27 & 0.70106 & 600 & 0.44519 \\10 & 0.79945 & 28 & 0.69754 & 700 & 0.43496 \\11 & 0.78991 & 29 & 0.69416 & 800 & 0.42629 \\12 & 0.78120 & 30 & 0.69090 & 900 & 0.41878 \\13 & 0.77320 & 31 & 0.68775 & 1,000 & 0.41217 \\14 & 0.76580 & 32 & 0.67471 & 1,200 & 0.40097 \\15 & 0.75891 & 33 & 0.68177 & 1,400 & 0.39173 \\16 & 0.75249 & 34 & 0.67893 & 1,600 & 0.38390 \\17 & 0.74646 & 35 & 0.67617 & 1,800 & 0.37711 \\18 & 0.74080 & 36 & 0.67350 & 2,000 & 0.37114\end{array}\end{array}\end{array}$

-Using the information in Case G.1,how much time will it take to produce the units in month 1?

• A) Fewer than 800 hours
• B) Greater than or equal to 800 hours but fewer than 1,100 hours
• C) Greater than or equal to 1100 hours but fewer than 1,500 hours
• D) Greater than 1,500 hours

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Definitions:

P/E Effect

That low P/E stocks have exhibited higher average risk-adjusted returns than high P/E stocks.

Forecasting Errors

Discrepancies between predicted data and actual data, indicating inaccuracies in models or expectations.

Earnings Expectations

The anticipated earnings reported by a company, influencing its stock price and investor perception.

Information Processing Errors

Mistakes made in analyzing and interpreting information which can lead to incorrect conclusions and potentially suboptimal decision-making.