Question 1

Section A

Oceanic Luxury Yachts is assembling a new class of custom yachts. The assembly process is subject to a learning curve.

The time taken to assemble the first yacht was 1,000 hours. The learning rate is 81%, which corresponds to a learning index (b) of -0.304.
Using the formula Y = ax^b, what is the cumulative average time per yacht (in hours) to assemble the first 4 yachts? (Round to the nearest whole hour)

Accepted Answer

Apply the formula Y = ax^b. a = 1000, x = 4, b = -0.304. Calculate 1000 * (4^-0.304).

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Calculating the total time for 4 units instead of the cumulative average time, or applying the 81% to the total time.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA PM — Performance Management Practice Exam 5

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