A Learning curve shows the relationship between the cost of producing an item or performing a task and the number

of units produced or task performed over time. OR The term learning curve refers to a graphical representation of the changing rate of learning for a given activity or tool.

1 hr

1st task 45 mins 2nd task 30 mins 3rd task EFFICIENCY/SPEED

25

5 PIECE 1 23

4 PIECE 2 EFFICIENCY

2 hrs

1hrs 30 mins TASK 1 1 hr TASK 2 TASK 3 EFFICIENCY

1885:

German psychologist Hermann Ebbinghaus coined the term during his research on memory and memorization.

1930:

Learning curves were first used by the aircraft industry . The Boeing Co. pioneered the discipline when it discovered that the cost to build new airplanes was highly predictable.

1936 :

At Wright-Patterson Air Force Base in the United States, it was determined that every time total aircraft production doubled, the required labour time decreased by 10 to 15 percent.

Airplane Industry.
Theodore Paul Wright in 1936.
Number of Airplane Cost of production

First New Airplane Second Airplane Third Airplane Fourth Airplane

$ 100 Million $ 80 Million $ 64 Million $ 51 Million

The more the airplane produced, the lesser the cost of production

The learning curve effect states that the more often a task is performed ,the less time will be required for each iterartion. Eg: Aircraft manufacturing Ship building Bridge construction Chemical/cement projects New product development

Application

Business

Non-Business

Service

Manufacturing

Labour efficiency Standardization, specialization, and methods improvements Technology-Driven Learning Changes in the resource mix Value chain effects

.flat og gradual learning curve

LEARNING CURVE

STEEP LEARNING CURVE

FLAT OR GRADUAL LEARNING CURVE

POSITIVE LEARNING CURVE

NEGATIVE LEARNING CURVE

Faster learning rate Large gain of knowledge in early stage Rules are simple and quickly learned Eg:chess,sports

Rate of knowledge is slowly spaced Gives ample time to imprint procedure and skill eg: a new entrepreneur or businessman

Learning slowly at first Learning is accelerating Low forgetting rate Low employee turn-over in company

Learning progresses at first and is slow later on. Learning rate is slow. High forgetting rate. High employee turn-over in company.

Capacity analysis and resourse planning Cost reduction proposal pricing Direct labour cost Break-even estimation Incentives for aggressive pricing in the early phase of product life cycle.

Depends on many assumptions Not accurate Not always applicable to indirect labour Old technique Not applicable to complex process

Labor learns as it works, and the more a worker repeats a given task, the more efficient the worker will become Hartley(1965)