Furrukh Bashir

Anum Noor
Samina Jahan
(temporary)
 In the history of Pakistan, learning curve have played a
very important role in lowering cost and attaining
efficiency, as employee gain experience, average cost
per unit decreases with increase level of output. Many
studies regarding learning curve in manufacturing
companies have been conducted in Pakistan.

 Repetition of the task is likely to make the people more

confident and knowledgeable and will eventually result
in a more efficient and rapid operation.
(temporary)
 So to check this concept, actual data on average
cost and output of Sial clothing mills Shuja abad,
Multan has been collected for the time period
from January 2007- December 2009.

 E-views.
 To analyze application of learning curve.

 (temporary)
 To analyze the growth or change of cost
and output of the company in the year
2007-2009.
 To test our managerial view (thinking).
 The Study uses simple regression analysis using Ordinary least
Square method. To check the application of learning curve, we
have used the following model;
(pwede kari na formula : Yx=k(x)^n?)
C = a Q ^b
logC = loga + b log Q

Where, “C” is average input cost of Qth unit of output, “Q” is

output, “b” is the slope and “a” is the average cost of 1st unit
of output. We have taken the log of the above function to
convert this model in linear form.
• Exponential form:
yx = kxn

Where
x = unit number
yx = man-hrs. to produce xth unit
k = hrs. to produce first unit
n = log b / log 2
b = learning rate (80%, etc.) expressed as decimal (.8, etc.)

• Logarithmic equation:
log yx = log k – n (log x)
Using collected data, we have estimated the following
Equation of learning curve:

logC = 12.174 – 0.62 logQ

Where above values for ‘a’ and ‘b’ are taken from the
table given in appendix B. By putting the different
values of “Q” in this equation and come up with these
results given in table 1.
From the empirical study, we can conclude that
the cumulative average cost per unit is decreased
by a constant percentage every time as output
doubles. So whenever firms’ output will be
doubled, its cost will be reduced due to the firms
employees experience effect. So, we recommend
that by focusing on the learning effect a firm can
reduce its average cost. So learning curve becomes
the key driver to reduce the cost.
Keith, N. and Patterson, J. W (1983). Estimation and Testing of
Learning Curve.
Journal of business and economic statistics, 1(4), 265-272.

Pendharkar, P. C. and Subramanian, G. H. (2006), An Empirical

Study of ICASE Learning Curves and Probability Bounds for
Software Development effort,
European Journal of Operational Research, 183, 1086-1096.