IE5541-HW3

# Since it is a prototype and things can go wrong and

• Notes
• 6
• 100% (1) 1 out of 1 people found this document helpful

This preview shows pages 5–6. Sign up to view the full content.

cost is added to the price. Since, it is a prototype and things can go wrong and cost can fluctuate an approximation to the final price is made. Also other costs such as testing, shipping box and final shipping and handling costs might not have been considered in this calculation. It should be noted that if this project goes beyond the prototype phase on to final production the cost will go down a lot considering production units will be much higher than the initial prototype cost. D. A decrease in the improvement curve means the total labor hours will decrease so the labor hours to build the prototypes will decrease meaning the prototypes can be finished and delivered before the promised delivery date. The cost of labor will decrease meaning more profit for the project, however it might not be as significant compared to the final selling price. Page | 5

This preview has intentionally blurred sections. Sign up to view the full version.

HW3 IE5541 Sunny Ahmed E. Since this has already been built there will not be anymore R&D cost. Although material cost is not linear in this case if we consider it to be linear then material cost for 4 should be 3,000,000. At 75% improvement curve for 4, the total labor hours will be 100,000 will be 2.946 x 100,000 = 29,460 hours. Therefore total labor cost will be 29460 x 300 = 88,38,000 NOK. Direct cost = 88,38,000 + 3,000,000 = 1,1838000 NOK Total Direct cost = 1,18,38000 + (1,18,38000 x 15%) = 1,36,13700 NOK Total cost including G&A = 1,36,13700 + (1,36,13700 x 15%) = 1,56,55,755 NOK Total sale price at 25% profit = 15655755 + (15655755 x 25%) = 19569693.75 NOK Therefore approximate sale price would be 1,96,00000 NOK for 4 more satellites after the prototype run. Page | 6
This is the end of the preview. Sign up to access the rest of the document.
• Fall '08
• LOPS

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern