b. What bid should LTI submit for the total order of 120 units, assuming that learning continues? What is the cost expected to be for the last unit under the learning rate you estimated?

Unit 60% 65% 85% 90% 95% 1.000 1.000 1.000 1.000 1 2 3 11.000 1.850 1.600 1.650 1.800 1900 1.950 2045 2.623 2.872 2.155 2578 4 3.345 2405 2710 2.746 3.556 4.339 5.101 5 2.946 4.031 3.774 4.662 5.538 6.404 6 Cumulative Improvement Factor 70% 75% 80% 1.000 1.000 1.000 1.700 1.750 2.268 2.384 2.502 2.758 2.946 3.142 3.15 3.459 3.7 38 3.593 3.934 4.29 3.960 4.380 4.834 4303 4.802 5.246 4.626 5.204 5.839 4.931 5.589 6.315 5.501 6.315 1.227 6.026 6.994 8.092 6.514 7.635 8.920 2977 3.274 4.688 7 3216 5.222 5845 3.572 3.847 8 3432 5.936 6.574 7261 9 3630 4.102 6.533 1290 8.111 8.955 10 3813 4.341 7.116 7994 12 4144 4.780 8.244 9374 10.62 14 4.438 5.177 9.331 10.72 12.27 | 16 4.704 5.541 10.38 12.04 13.91 18 4946 5.879 6.972 8.245 9716 11.41 15.52 20 5.171 6.195 10.48 12.40 13.33 14.61 15.86 8.828 9.388 17.13 22 5279 6.492 11.23 13.38 18.72 7.407 7.819 8.213 8.404 24 5574 6.773 9.928 11.95 14.33 17.10 20.31 25 5.668 6.909 10.19 1231 14.80 17.71 21.10 30 6.097 11.45 14.02 17.09 20.73 25.00 7.540 8.109 9.305 10.13 35 6.478 12.72 15.64 19.29 23.67 28.86 40 6.821 8.631 10.90 13.72 17.19 21.43 2654 45 7.134 11.62 14.77 18.68 23.50 29.37 22.68 36.47 40.22 50 9.114 9.565 10.39 7.422 12.31 15.78 2012 25.51 32.14 7.941 13.57 17.67 22.87 29.41 3757 47.65 60 70 8.401 11.13 14.74 1943 25.47 33.17 42.87 54.99 80 8814 11.82 1592 21.09 27.96 36.80 48.05 90 9.191 12.45 16.83 2267 30 35 40.22 53.14 | 100 9539 13.03 24.18 32.65 43.75 58.14 17.79 19.57 62.25 69.45 76.59 90.71 104.7 118.5 120 10.16 14.11 27.02 37.05 50.39 67.93 140 10.72 15.08 21.20 56.78 77.46 29.67 3217 41.22 45.20 160 11.21 15.97 22.72 6295 86.80 180 11.67 16.79 24.14 34.54 49.03 68.95 95.96 132.1 200 12.09 17.55 25.48 36.80 | 52.72 74.79 105.0 145.7 250 12.01 28.56 4205 61.47 88.83 126.9 1792 19.28 20.81 300 13.81 31.34 46.94 69.66 1022 148.2 2122 14.51 22.18 33.9 51.48 77.43 169.0 350 400 115.1 127.6 244.8 277.0 15.14 22.44 36 26 55.75 4.85 1893 450 24.60 38.48 59.80 91.97 139.7 209.2 309.0 15.72 16.26 500 25.68 40.58 6368 98.85 151.5 228.8 340.6 600 17.21 27.67 44.47 7097 1120 174.2 267.1 403.3 700 18.06 29.45 48 04 7777 124.4 16.1 304.5 465.3 800 31.09 51.36 84.18 136.3 2173 341.0 526.5 900 32.60 54.46 90 26 1477 2379 5872 18.82 19.51 20.15 21.30 1.000 57.40 2579 647.4 3769 4122 4812 158.7 1797 11.200 96.07 107.0 117.2 62.85 296.6 31.0t 36.59 38.92 41.04 1766 1.400 2232 67.85 199.6 3339 548.4 884.2 1.600 23.23 7249 126.8 218.6 3699 6142 1001 1.800 24.06 43.00 76.85 135.9 236.8 404.9 6788 1116 2000 24.83 44.84 8096 14.7 254.4 438.9 7422 1230 2500 26.53 48.97 90 29 165.0 296.1 520.8 997.0 1513 3.000 27.9 52.62 98.90 183.7 335.2 5989 1047 1791 Unit 60% 65% 85% 90% 95% 1 1.0000 1.0000 1.0000 1.0000 6500 1.0000 9500 2 8500 .9000 Unit Improvement Factor 70% 75% 80% 1.0000 1.0000 1.0000 .7000 .7500 8000 5682 6338 .7021 4900 5625 .6400 .4368 5127 .5956 3977 4754 .5617 6000 4450 3600 3 8462 9219 -5052 4225 .7729 .7225 4 8100 9025 5 3054 3678 6857 .6570 7830 .7616 .8877 .8758 6 2670 3284 7 2984 3674 4459 .5345 .6337 .7439 2383 2160 8 2746 3430 4219 .5120 .6141 7290 7161 .8659 .8574 8499 9 .1980 2552 4017 4930 3228 3058 .5974 5828 10 1832 3846 4765 .7047 2391 2135 .8433 8320 12 2784 3565 .4493 5584 .6854 1602 1430 14 1940 .4276 6696 2572 2401 3344 3164 5386 5220 .8226 8145 16 1290 1785 4096 .6561 .6445 18 1659 2260 3013 5078 . 1188 1099 3944 3812 8074 .8012 20 1554 2141 2884 4954 6342 22 1025 1465 3697 4844 2038 1949 2772 2674 .6251 .6169 .7955 .7904 24 0961 3595 4747 1387 .1353 25 1908 2629 3548 4701 .0933 0815 .6131 5963 7880 7775 30 2437 1208 1097 1737 1605 3346 3184 4505 4345 0728 2286 15825 .7687 35 40 0660 1010 2163 3050 4211 .1498 1410 5708 .5607 .7611 .7545 45 0605 0939 2060 2936 4096 50 0560 2838 .7486 1336 1216 0879 0785 0713 1972 .1828 3996 3829 5518 5367 60 0489 2676 .7386 .0437 1715 7302 70 80 2547 2440 1122 1049 0987 3693 3579 5243 5137 .0396 .0657 1622 7231 .7168 90 .0363 0610 1545 .2349 3482 .5046 4966 100 0336 0572 0935 3397 .7112 .1479 1371 2271 2141 120 0294 0510 0851 3255 4830 .7017 140 0464 3139 .0262 0237 0786 0734 1287 1217 2038 1952 4718 4623 .6937 6869 160 0427 3042 2959 180 0397 0691 .1159 .1879 6809 0218 .0201 200 0371 0655 .1816 2887 4541 4469 4320 .6757 250 .0323 .1109 .1011 0937 .1691 2740 .0171 .0149 .6646 .0584 .0531 300 0289 1594 2625 4202 6557 350 .0133 0262 0879 1517 4105 .6482 0491 .0458 2532 2454 400 .0241 1453 4022 .6419 .0121 0111 0832 0792 450 0224 0431 1399 2387 3951 3888 .6363 6314 500 0103 0210 0408 0758 .2329 600 0090 0372 0703 .1352 .1275 1214 2232 3782 .0188 0171 .6229 700 0344 0659 2152 3694 .6158 800 0157 .6098 0080 .0073 .0067 .0062 0321 0302 0624 .0594 1163 .1119 2086 .2029 3620 3556 900 0146 .6045 1.000 .0137 0286 3499 0569 .0527 .1082 1020 .1980 .1897 .5998 .5918 1.200 .0054 .0122 0260 3404 1.400 .0048 0111 0240 0495 0971 1830 3325 5850 1.600 .0044 0102 0225 0468 .0930 . 1773 3258 .5793 0040 .0095 .1725 3200 1.800 2.000 0211 0200 0895 0866 0446 0427 0389 5743 .5698 0037 0089 0077 3149 .1683 1597 2.500 0178 0806 3044 5605 .0031 0027 3.000 .0069 0162 0360 0760 . 1530 2961 .5530 Lazer Technologies Inc. (LTI) has produced a total of 20 high-power laser systems that could be used to destroy any approaching enemy missiles or aircraft. The 20 units have been produced, funded in part as private research within the research and development arm of LTI, but the bulk of the funding came from a contract with the U.S. Department of Defense (DoD). Testing of the laser units has shown that they are effective defense weapons, and if redesigned to add portability and easier field maintenance, the units could be truck-mounted. The DoD has asked LTI to submit a bid for 100 more units. The 20 units that LTI has built so far cost the following amounts and are listed in the order in which they were produced: Use Exhibit 6.4 and Exhibit 6.5. UNIT NUMBER 1 2 3 4 5 COST ($ MILLIONS) $14.0 10.9 9.8 8.7 8.3 7.8 7.4 7.1 6.8 6.6 UNIT NUMBER 11 12 13 14 15 & COST ($ MILLIONS) $6.3 6.2 6.0 5.9 5.7 5.7 5.5 5.4 5.3 5.3 16 17 18 19 20