Learning Curve ProjectBUS461 fa15 (1).doc Learning Curve Project (40
General Electric manufactures
and refurbishes GE diesel locomotives at a facility in Erie Pennsylvania. The facility remanufactures machines that
have reached a point in their service life such that they are beyond the point
of applying ordinary maintenance procedures.
A model that entered service 10 years ago has begun to show up at the
facility. A crew of 15 mechanics
recently required 3.4 weeks to refurbish the first machine that came to
facility. Due to a backlog of other
repair and refurbishing work, crews will not refurbish any other units until
Based on experience with
other models, the company anticipates a 93% learning curve (with each doubling
of the number of units repaired) with regard to man-hours required to refurbish
a locomotive. The company expects to
refurbish 16 locomotives in the coming year (2016); that number is expected to
grow by 20 percent per year for the next four years.
Compensation to mechanics,
including wages, benefits, insurances, etc. is currently $43 per hour, a figure
that is expected to grow by 4% per year.
You may assume that mechanics work 40 hours per week and 48 weeks per
year (net of vacations and sick days).
As a company analyst, you
have been asked to do the following:
Estimate refurbishing labor hours
required for this particular model in each year, 2016-2019
Estimate refurbishing labor costs
in each year, 2016-2019
An estimate of refurbishing
manpower headcount required in each year, 2016-2019
Create a spreadsheet tool to
derive the estimates above. Use excel to
emulate the exhibit on the following page.
Print the corresponding exhibit in excel, and staple it on top of the
remainder your printed spreadsheet.
Structure your spreadsheet as per directives given earlier in the
Labor hours required
Hours required for locomotive
Hours required for locomotive 48:________________________
Average hours required, first
50 locomotives: _____________________