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# LEARNING CURVE

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´ .Learning curve ³The term learning curve refers to a graphical representation of the changing rate of learning for a given activity or tool.

INTRODUCTION  Also called improvement curve or progress curve  Graphical representation  rate of improvement  rate of change in average cost  Employed in setting incentive rate schemes  Relation between cumulative output and average unit cost .

.EXAMPLE An 80 percent learning curve means the per unit average cumulative cost (in hours or dollars) falls to 80 percent of the previous per unit average cumulative cost as the cumulative output doubles.

psychologist discussed the properties of different types of learning curves  1936 . the 1st person time required to memorize a nonsense syllable increased sharply as the number of syllables increased  1934.Arthur Bills.History  1885.Hermann Ebbinghaus.Theodore Paul Wright effect of learning on labour productivity in the aircraft industry mathematical model of the learning curve .

\$100million  2nd copy of new airplane .AIRCRAFT INDUSTRY  1st copy of new airplane .\$64million  8th copy of new airplane -\$51 million .\$80million  4th copy of new airplane .

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Flat or gradual learning curve. .Types of learning curve Steep learning curve.

Chess . Harder to climb. Rules are simple and quickly learn Difficult skill to learn.Steep learning curve:Large gain of knowledge in the early stage. Eg:.

. Gives ample time to imprint the procedure or skills. Flat or gradual learning curve:- Rate of knowledge is slowly spaced.

LEARNING CURVE FORMULATION Learning curve models Direct labour hour Margin cost .

Ycx = average cost of the first x units.Margin cost model Formula :Ycx = ax-b where. x = the cumulative unit number output. . b = the learning elasticity. which defines the slope of the learning curve. a = the first unit cost.

and 1 . n = log /log 2.Direct labour hour model Formula: Y = KXn where. Y = the number of direct labor hours required to produce the Xth unit. = the learning rate. .= the progress ratio. X = the cumulative unit number. K = the number of direct labor hours required to produce the first unit.

Learning is accelerating. . Eg: student learning calculus.Learning curve Positive Curves Negative Curves Learn slowly at first and then faster later on. Eg: a child learning to tie her shoes. Learning is slowly. Learn quickly at first and then our progress slows.

MANAGERIAL USES  Pricing  Production  Financial planning  Modernise or replace decisions .

Break even estimation. Estimation of production-line performance. Direct labour cost.OTHER USES        Capacity analysis and resource planning. Incentives for aggressive pricing in early phases of a product life cycle. Cost-reduction proposals pricing. Cost estimation. pricing and staff planning. .

bridge construstion. . Eg:. new product development. ship building. the less time will be required on each iteration´.aircraft manufacturing.etc.LEARNING CURVE EFFECT ³The learning effect states that the more often a task is performed.

REASONS FOR THE EFFECT OF LEARNING CURVE  Labour efficiency  Standardisation. specialisation and methods of improvement  Technology driven learning  Changes in resource mix  Product redesign  Value chain effects  Shared experience effect .

zigzag .LEARNING CURVE .

LIMITATIONS        Depends on many assumptions Best results only in static system Difficulty in application Zigzag curve Old technique Money and time constraints Not accurate .

Case-study  Douglas Aircraft. .

. b) The degree to which the capacity is exploited.Factors that affecting learning curves:a) The inherent capacity of an operation to improve.

Conclusion .