They agreed to a contract based upon learning curve cost, Operation Management

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They agreed to a contract based upon learning curve cost

CAT gave Wausau Foundry in Wisconsin a contractor for 1000 cast iron bulldozer treads for their Track Type Tractors. They agreed to a contract based upon “ Learning curve” cost calculations.

The first tread set took 800 hours to design, manufacturing and assemble.The second tread set took 680 hours to produce.And this was agreed to as the Learning Curve percentage for the full order.

What were the hours for unit #3:

What were the hours for unit #10:

What were the total hours for the first 20 units:

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Operation Management: They agreed to a contract based upon learning curve cost

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Operation Management: They agreed to a contract based upon learning curve cost

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