Problem $6-8($Algo$)$

Lambda Computer Products competed for and won a contract to produce two prototype units of a new type of computer that is based

on laser optics rather than on electronic binary bits.

The first unit produced by Lambda took $5,000$ hours to produce and required $$250,000$ worth of material, equipment usage, and

supplies. The second unit took $3,750$ hours and used $$212,500$ worth of materials, equipment usage, and supplies. Labor is $$30$ per

hour. The company expects "learning" to occur relative to labor and also the pricing of parts from suppliers. Use Exhibit $6\mathrm{.}5.$

a$.$ Lambda was asked to present a bid for $10$ additional units as soon as the second unit was completed. Production would start

immediately. What would this bid be$?$

Cost for $10$ more units

b$.$ Suppose there was a significant delay between the contracts. During this time, personnel and equipment were reassigned to other

projects. What would the new bid be$?$

New bid