SIE 462 UPC Midterm Exam (2022 Spring)

May 14, 2022

Name: Student ID:

Note
:
1. A letter size paper with any content (double-sided) and a simple calculator are permitted;
2. The time length of this exam is 50 min and it has a total of 85 points;
3. If you have questions and cannot get immediate help, write down what you think
and complete the problem as you understand it.

A. Make the Calculations.

(1) Consider the experience curve shown. What percentage experience curve that does this represents?
(5 points)

(2) An analyst predicts that an 80 percent experience curve should be an accurate predictor of the cost
of producing a new product. Suppose that the cost of the first unit is $500. What would the analyst
predict is the cost of producing the? A. 100th unit B. 10,000th unit? (2.5 points each)

1
B. Problem solving. (show your steps and / or provide necessary explanation to get full
credit; a correct answer without steps will get no more than 25% full credit)

Delon’s Department Store sells several of its own brands of clothes and several
well-known designer brands as well. Delon’s is considering building a plant in
Malaysia to produce silk ties. The plant will cost the firm $5.5 million. The
plant will be able to produce the ties for $1.20 each. On the other hand, Delon’s
can subcontract to have the ties produced and pay $3.00 each. How many ties
will Delon’s have to sell worldwide to break even on its investment in the new
plant? ( 5 points)

( 5 points each)

2
( 5 points each)

3
( a and b 10 points each, c 20 points)