Unit Research Associates (URA) has been asked to bid on a contract for 200 high tech surveillance drones for the NSA (Who claims they will be used to monitor “snow fall†in the Sierra Nevada Mountains). Fortunately, URA had completed a similar project for the Defense Department and has done a careful job of recording cost and efficiency data. Labor hours for the first of the DD drones was 2500 hours and the time for the 50th was 930. Similarly, material cost for the first of the DD drones was $37,000 in materials, while the 50th required just $15,000. For bidding purposes, labor cost is assumed to be $35/hour. In addition, an overhead rate of 35% of labor and material cost is added to cover administration and insure an adequate profit margin on each bid (“Bid price†= 1.35*(labor cost + material cost).
a. What are the estimated learning coefficients for labor and materials?
b. How many labor hours will be required to produce the 200th drone?
c. What is the bid price (labor, materials, and overhead) for the 200th drone?
d. What is the bid price for all 200 drones?
e. What is the average bid price (per drone) of all 200 drones?
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