A company has just received a contract for 700 units of a


A company has just received a contract for 700 units of a certain product. The pricing department has predicted that the first unit should require 2,250 hours. The pricing department believes that a 75 percent learning curve is justified. If the actual learning curve is 77 percent, how much money has the company lost? Assume that a fully burdened hour is $65. What percentage error in total hours results from a 2 percent increase in leaming curve percentage?

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Operation Management: A company has just received a contract for 700 units of a
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