a NEGOTIATION, LSM 422 HOMEWORK (4) ON LEARNING CURVES Due on Wednesday, October 20, 2021 1. You are purchasing a special equipment for military use. The supplier reveals its cost structure as follows: Material cost $40 per unit Labor hours = 8 hours per unit for the first unit, Labor cost = $10/hour a. List the material and labor cost and labor + material cost for the first 8 units when the supplier utilizes a learning curve of 85%. 2. You are a supplier for ABC company. Your cost structure is as follows: Material cost - $60 per unit Labor cost $40 per hour. a List the material and labor cost and labor + material cost for the first 10 units if you utilize a learning curve of 90 percent. 3. You are a logistics manager for Huntsville Logistics, Inc. and you place an order with a supplier for 150 units of a product. The supplier shares with you her cost structure which is as follows: Material cost $20 per unit, Labor cost - $30 per unit, Overhead cost = 40% of the labor and material cost, profit is added as 20 % of the above three costs. a. Determine the total cost per unit of this order. You realize later on that you need another 900 units of the same product and therefore order another 900 units. The supplier also shares with you that her production learning curve is 88% and is willing to charge less than the first order per unit cost for this second order b. Based on your knowledge of learning curves, how much will you pay to the supplier per unit for the second order? c. How much will you save because you are not paying now at the rate you paid for the first order? 4. As a logistics manager you are also responsible for selling your products and negotiate your selling prices. A local army unit places an order for 500 units of AK99 that you have specially designed. Your cost structure is as follows: Material cost =$80, labor cost = $100 (based on 5 hours of labor @$20/hour), overhead cost is 50% of the labor and material costs, and profit is added as 20% of the three costs. Based on the quality and usefulness of your product, the army unit orders an additional 2500 units of AK99. You negotiate that the production learning rate is 90%. a What will be your unit price? b: How much will you charge for the new order of 3000 units of AK99? c. Suppose your material supplier gives you a 10% discount on the second order because of your large order, what would be your unit cost of the second order