Problem: Company X collected the following cost data on the first 6 units of a new machine.
Unit number Cost, $ millions
1 300
2 244
3 211
4 194
5 179
6 169
Using Excel:
(a) Estimate the learning rate.
(b) Company X is bidding on a contract for 24 new machines. Explain how the estimated learning curve is helpful to Lockheed.
(c) Estimate the total cost of building 24 additional machines.
(d) Estimate the cost of building the 30th machine.