A purchasing manager at a local manufacturing company was quoted an estimated time of 47 labor hours to produce a prototype for a new product. The supplier also estimated the learning rate to fall between 82 and 85 percent.
a. What percentage decrease should the purchasing manager expect in required manufacturing by the fifth unit?
b. Suppose an expected decrease of approximately 37 percent over the first units was 30 percent. What should the purchasing manager infer about the suppliers efficiency?