A small manufacturer builds wooden pleasure boats in a craftsman manner by traditional labour-intensive methods. The first boat is estimated to take 650 hours of skilled labour, 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 rate. How many boats can they make in their first year?

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SIGIFREDO RIVERA · Accepted Answer

Final Answer : The number of hours available for the first year is 6,000 hours. Use the total time factor from the 90% column of Table E.3 in the text. 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.

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