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    Learning curve theory describes how the average time to produce a unit decreases by a constant percentage each time cumulative output doubles. As workers gain experience, they become more efficient. The formula Y=ax^b is used to calculate learning rates, where a is the time for the first unit, x is the unit number, and b is the learning rate. Direct labor costs and variable overhead are affected by learning curves, but material and fixed costs are not. Limitations include that learning effects may not always occur and stable work conditions are assumed.

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    Learning curve theory describes how the average time to produce a unit decreases by a constant percentage each time cumulative output doubles. As workers gain experience, they become more efficient. The formula Y=ax^b is used to calculate learning rates, where a is the time for the first unit, x is the unit number, and b is the learning rate. Direct labor costs and variable overhead are affected by learning curves, but material and fixed costs are not. Limitations include that learning effects may not always occur and stable work conditions are assumed.

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    4 views1 page

    Untitled

    Uploaded by

    muhammad bilal
    Learning curve theory describes how the average time to produce a unit decreases by a constant percentage each time cumulative output doubles. As workers gain experience, they become more efficient. The formula Y=ax^b is used to calculate learning rates, where a is the time for the first unit, x is the unit number, and b is the learning rate. Direct labor costs and variable overhead are affected by learning curves, but material and fixed costs are not. Limitations include that learning effects may not always occur and stable work conditions are assumed.

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    Learning Curve

    What is learning curve theory?

    When work is fairly repatitave nature employee is likely to gain more experience and skill as he produces
    great unites eventually the time required to produce a unite start falling by a certain percentage up to a
    certain level.

    Note: in theory we assume that the average time per unite falls by constant percentage every time out
    put is doubled.

    When we are calculated that we should make table which include 4 things : 1 unites 2 average time per
    unite 3 total time per unite 4 incremental time.

    Formula for learning curve: Y=axb

    Y= average time for unite X

    A = time for unite 1

    X = unite for which Y is calculated

    B = learning rate. Mean log of learning rate/log 2

    What costs are affected by learning curve?

    Direct labour cost and variable overhead

    Material cost is unaffected by learning curve

    Fixed cost is unaffected by learning curve.

    Limitations of learning curve theory

    1 the learning curve phenomenon is not always present

    2 it assume stable conditions at work which is not possible

    3 it assumes certain motivation among employees

    4 it assume there is no break etc

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