1. Central Electronics Corp. produces semiconductors and has a learning curve of .7. The price per bit is 100 millicents when the volume is .7 × 10 12 bits. What is the expected price at 1.4 × 10 12 bits? What is the expected price at 89.6 × 10 12 bits?
2. Regional Power owns 25 small power generating plants. It has contracted with Genco Services to overhaul the power turbines of each of the plants. The number of hours that Genco billed Regional to complete the third turbine was 460. Regional pays Genco $60 per hour for its services.
As the maintenance manager for Regional, you are trying to estimate the cost of overhauling the fourth turbine. How much would you expect to pay for the overhaul of number 5 and number 6? All the turbines are similar, and an 80% learning curve is appropriate.