Problem 8 identified how long it should take to complete the fifth oil-drilling platform that Natural Resources plans to purchase. How long should all five oil-drilling rigs take to complete?
In problem 8
It took MegaTech, Inc. 100,000 labor-hours to produce the first of several oil-drilling rigs for Antarctic exploration. Your company, Natural Resources, Inc., has agreed to purchase the fifth (steady state) oil-drilling rig from MegaTech’s manufacturing yard. Assume that MegaTech experiences a learning rate of 80%. At a labor rate of $35 per hour, what should you, as the purchasing agent, expect to pay for the fifth unit?