Module E: 10 points]. You oversee a small local assembly shop that specializes in emergency mechanical ventilators/respirators. One of your local hospitals has promised to award you a large contract for the assembly of 20 emergency mechanical ventilators/respirators. The suggested bid price in the contract is based on an average of 85 hours of direct labour per unit. You have just produced the first unit. The first unit took 110 hours of direct labour to manufacture. Although the first unit took 110 hours, the second unit could be completed in just 99 hours.

1. What is the learning rate, L? What is the progress rate, i? How many hours do you expect the assembly of the fifth unit to take? How many hours do you expect the assembly of the 20^th unit to take? Calculate the percentage change in productivity between the 1^st and the 20^th unit. (4)
2. What is the total amount of hours to assemble all 20 units? What is the average time to assemble each of the 20 units? Is the contracts assumption about the average labour hours per unit valid or should the bid price be revised? Why? (3)
3. After you completed the order for the 20 units, another hospital has just placed an order for 10 units. How many total labour hours will be needed to satisfy the second hospitals order? (2)
4. Suppose the workers can supply 3535 labour hours each year to the assembly shop. What is the firms annual capacity to assemble the mechanical ventilators/respirators, that is, how many units can the firm assemble in one year? (1)