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Arrow Smith Corporation, an automotive parts supplier in Smithville, Tennessee has recently introduced "Lean Manufacturing" strategies in one of its product lines. This has resulted in a reduction in its learning curve from 90% to 80%. A new product will typically take 10 hours for the production of the first unit using a team of 4 people.
i. What is the estimate of the time to produce the 50th unit under each curve? The 100th unit?
ii. If the operators are paid $15 dollars per hour, how much is saved on the 100th unit comparing the two learning curves?
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