Learning curve

[Patrick]

Hi,
This may be useful for you in your exam.

Learning curve model

Y = ax(b to the power of X)

Where,
Y = cumulative average time taken per unit
a = time taken for the first unit
X = total no. of units
b = index of learning (log of learning rate/log2) where, log2 = 0.30103

Advantages of learning curve:

Improves planning process
Sets standards
Determines labour cost for product pricing
Helps in taking many other decisions e.g. make or buy
work scheduling


Reservations with learning curve:

Not applicable to machine intensive procedures
Assumes labour rate remains the same, which may not be true
Applicable only when same work or job is repeated
Applicable only to new jobs / industries / workers
Presumes learning effect only if production is doubled
Assumption that time required for a job will decrease does not hold true in reality
Not applicable to managerial work


Regards,
F5 Author

[wahaj]

hi
there is big limitations in a learning curve that indirect cost increase if a labour is not intersted in the process of learning