Analysis and Forecasting Techniques Paper 4

1

Seacraft, Inc., received a request for a competitive bid for the sale of one of its unique boating products with a desired modification. Seacraft is now in the process of manufacturing this product but with a slightly different modification for another customer. These unique products are labor intensive and both will have long production runs. Which one of the following methods should Seacraft use to estimate the cost of the new competitive bid?






2

The technique used to predict the change in direct labor hours as a new process stabilizes is






3

Learning curves are best used to predict






4

A manufacturing company has the opportunity to submit a bid for 20 units of a product on which it has already produced two 10-unit lots. The production manager believes that the learning experience observed on the first two lots will continue for at least the next two lots. The direct labor required on the first two lots was as follows: ? 5,000 direct labor hours for the first lot of 10 units ? 3,000 additional direct labor hours for the second lot of 10 units The learning rate experienced by the company on the first two lots of this product is






5

Which one of the following will allow a better use of standard costs and variance analysis to help improve managerial decision-making?






6

Which one of the following techniques would most likely be used to analyze reductions in the time required to perform a task as experience with that task increases?






7

A manufacturing firm plans to bid on a special order of 80 units that will be manufactured in lots of 10 units each. The production manager estimates that the direct labor hours per unit will decline by a constant percentage each time the cumulative quantity of units produced doubles. The quantitative technique used to capture this phenomenon and estimate the direct labor hours required for the special order is






8

Which one of the following statements best demonstrates the concept of the learning curve?






9

Langley Corporation is developing a new product that will be manufactured in pairs. The company recently produced the first two units of this product using 200 hours of direct labor time. If Langley has a 90% learning curve and uses the cumulative average-time learning model, the total direct labor time to manufacture the first four units of this new product is






10

The quantitative technique used to project the direct labor costs for full-scale production of a product from the initial run of the product is






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