Reference no: EM133327067

CSU Inc. is working to get into the electric truck market. They recently pioneered the "Viking", a fully electric semi with an 800-mile range on a single charge and a hauling and handling performance that is second to none in the trucking market. They recently began mass production of the vehicle. Building the first truck took them 120 hours. The 20th truck has rolled off the line after just 74 hours. Calculate "b" from the learning curve formula. With your "b" from Part a), calculate "R", the learning curve for CSU Inc. With your "b" from Part a), extrapolate the cumulative average time for the 100th truck off the line.

Management has recently learned that a competitor is on an 85% learning curve. This is now the benchmark. Assuming CSU Inc. would also operate on an 85% learning curve, extrapolate the cumulative average time for the 100th truck off the line.

Briefly explain in your own words what the learning curve measures. Does the cumulative average time to produce the Xth unit have a linear or non-linear relationship with the cumulative number of units produced? How can you tell?