Reference no: EM1312319

Q. During the 1950s also 60s, Mr. T. Ohno of Toyota developed the lean Production System. Subsequently many other Japanese automobile companies adopted it. The net result was the Japan's automobile industry improved its productivity throughout this period relative to the US, which generally just kept up with inflation due to its already high rate of accumulated experience also relatively slow growth. Suppose the Japanese industry started in 1955 with production of 100,000 cars every year also an initial cost of $2,000 every car also that production (demand) grew 50% every year for the next five years also then 25% every year for the next ten years. If Japanese relative costs compared to the US dropped 20% for every doubling of accumulated experience (the total amount ever produced), in which year would Japanese costs equal US costs if the US cost every car in 1955was %1000 (?In your calculation, you can Suppose that for comparative purposes the US industry's cost remained constant also would have remained constant even if they had supplied the Japanese marketplace,) Given are real discount rate on Japanese government bonds of 6% during this period, by 1970 was the cost to Japan of protecting this industry recovered due to its improved long run productivity compared to having imported cars from the US?