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Learning Curve

Learning curves are often used to measure an individual's progress against an average. A Learning Curve is also an industrial tool or formula for the expected reduction of unit costs for large quantity production of components. The most widely accepted cost-estimating tool for adjusting cost to volume is the learning curve.

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Manizeh Shahrin
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261 views5 pages

Learning Curve

Learning curves are often used to measure an individual's progress against an average. A Learning Curve is also an industrial tool or formula for the expected reduction of unit costs for large quantity production of components. The most widely accepted cost-estimating tool for adjusting cost to volume is the learning curve.

Uploaded by

Manizeh Shahrin
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Assignment

Innovative Product
TALKING REFRIGERATOR

Prepared for:
Dr. M. Z. Mamun
Course Instructor
P 501: Managing Operations

Prepared by:
Manizeh Shahrin Sayeed
Roll-56
MBA 44th (Day), Section A

Institute of Business Administration, 4 March 2011


Assignment

Learning Curve

Prepared for:
Dr. M. Z. Mamun
Course Instructor
P 501: Managing Operations

Prepared by:
Manizeh Shahrin Sayeed
Roll-56
MBA 44th (Day), Section A

Institute of Business Administration, 4 March 2011


A learning curve is a concept used to measure how quickly a skill can be mastered. Usually
shown as a simple graph, a learning curve often depicts the combination of the time it takes to
learn a new idea or skill set, combined with the rate at which mastery is achieved. Learning
curves are often used to measure an individual’s progress against an average.

German psychologist Hermann Ebbinghaus coined the term during his research on memory and
memorization in the late 19th century. In his 1885 work, Memory: A Contribution to Experimental
Psychology, Ebbinghaus described his findings regarding both the learning curve, or rate at which
knowledge is gained, and the forgetting curve, a related graph that measures how quickly
memorized information is lost. His book is considered a groundbreaking work in the field, and
quickly led to the popularity of using learning curves as a means of measuring progress.

A Learning Curve is also an industrial tool or formula for the expected reduction of unit costs for
large quantity production of components. Learning curves draw from historic building experience
to determine expected reductions in labor and materials costs. Expected reductions can be
gauged from the labor and materials content of the manufactured item, plus the number of
doublings of the initial production run. Estimators will apply learning curves under guidance from
management.

Cost estimates need to reflect the observed characteristic that costs will vary in proportion to the
quantity produced. Quantity discounts on commodities or on commercially available components
is one aspect. The amortization of fixed set-up or tooling costs over the production run for a
forging or casting application is another. The most widely accepted cost-estimating tool for
adjusting cost to volume is the learning curve. This assumes that repetitive production costs will
decrease due to learning by the manufacturing staff - by increasing yields, increasing operation
throughput, improved tooling, substituting equipment for labor, eliminating unnecessary steps,
and process improvement and substitution.

As a basis for discussion, three areas of learning are examined: (1) preproduction learning, (2)
intratask learning, and (3) exoteric learning. This method of classification emphasizes that
learning, and therefore the learning curve model, is influenced by factors that emanate from
different sources at different times during the production process.

Preproduction Learning. Knowledge acquired before a process starts can be generally


described as preproduction learning. The a component in the learning curve model, y =
a[x.sup.b], represents this type of learning. The a value, which is the time required to produce the
first unit, is directly related to efforts preceding any new task. Examples of this classification of
learning include the development of models and prototypes, components testing and
experimentation, and employee training and rehearsals. Individuals involved in this phase of
learning are usually characterized as being specialists.

Intratask Learning. This type of learning occurs during the production process. The b value, the
rate of learning index, represents this classification of learning. Examples of encouraging this type
of learning are on-the-job training, incentive awards for new ideas, and application of the learning
curve to provide values against which actual performance can be compared. Employees
influenced by this type of learning are typically being trained in a new process.

Exoteric Learning. This category of learning derives from sources external to the organization.
The effect of this type of learning on the learning curve model may be reflected in both the a and
b values. Examples of this source of learning include feedback from trade associations, suppliers,
and customers. Learning of this nature has been described as random in the sense that it cannot
be planned.

Learning curves result in a fixed percentage decline in unit costs with each doubling of cumulative
volume. A 70% learning curve (doubling of volume drops costs by 30%) is considered very
aggressive; a 95% curve (doubling of volume drops costs by 5%) is considered very
conservative. Labor-intensive operations normally have curves in the 80%-85% range; machine-
intensive operations have curves in the 90%-95% range. If a learning curve, or cost estimates for
different quantities are available for a given item, use that information. If such information is not
available, use the 80%-85% and 90%-95% general guidelines for labor- and machine-intensive
elements.

The S-shaped learning


curve is most obvious
when someone learns a
highly complex task.
The initial part of the
curve rises slowly as a
person becomes
familiar with basic
components of a skill.
The steep ascending
phase occurs when
there is enough
experience with
rudiments or simple components to start "putting it all together." Rapid progress follows until the
skill "hits a ceiling" or stabilizes at a high level. People often speak of a steep learning curve when
they mean the opposite. A steep learning curve is one in which skill improves quickly, meaning
something is easy to learn. However, what most people mean by "steep learning curve" is difficult
learning experience. No doubt they are thinking of steep hills and steep mountains which make
climbing difficult. In actuality, the steepest part of the learning curve is the portion where learning
is fastest and easiest.
Before considering the behavioral characteristics of learning, the learning curve model and its
mathematical characteristics are examined. Several versions of the model have been
proposed[3]. For illustrative purposes, the cumulative average time learning curve model is used
in this article. It follows the mathematical power function:
y = a[x.sup.b]
where y = cumulative average time required per unit of output, a = time required for first unit, x =
cumulative number of units produced, and b = learning parameter. Empirical evidence suggests
that the time required to accomplish most tasks diminishes by a constant percentage each time
output doubles. Therefore, in order to obtain the best fit of the learning curve using empirical data,
a doubling of output is usually specified as the interval over which a constant rate of decline
occurs.
The learning curve can be a very useful tool when it is properly applied. The intent of this article
has been to suggest that behavioral implications should be considered when the model is used in
establishing production standards. This approach recognizes that learning may originate from
different sources and may exhibit interrelationships that the mathematical model by itself does not
communicate. Further, unlike the mathematical model, a behavioral approach acknowledges that
learning is enhanced in an environment that encourages research, experimentation, and
continuation of the learning process.
A behavioral approach to learning incorporates human attributes and expectations into the
mathematical model. This assimilation permits control without stifling performance. Too often the
human element is forsaken when production standards are adopted, and too often the standards
are not later modified or adjusted to reflect changes taking place in the process. Human
characteristics should shape tools such as the learning curve to render them effective in
monitoring and controlling performance. A behavioral approach to learning curve implementation
also helps to assure a more realistic and acceptable modeling of the learning process which may
have significant implications for employee innovation and morale.

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