A small manufacturer builds wooden pleasure boats in a craftsman manner by traditional labor-intensive methods. The first boat is estimated to take 650 hours of skilled labor, which cost $40 per hour
They currently have three workers that can work 2,000 hours a year. They assume that there is a 90% learning curve. How many boats can they build in their first year?
The number of hours available for the first year is 6,000 hours. Use the total time factor from the 90 percent column of Table E.3. The total number of hours needed to make eleven units is 650 × 8.689 = 5,648 hours; twelve would require 650 × 9.374 = 6,093 hours. So they can build 11 in the first year.
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