Supplement 7
Learning Curves
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1
Learning
Learning is the permanent change in behavior due to repetition.
Types of learning: Individual and Organizational.
Learning Curve effect first observed in 1936 in airplane industry.
• Time needed to produce a unit decreases with each
additional unit.
• Time needed decreases at a decreasing rate as cumulative
production increases.
• Decrease in time follows an exponential curve called
learning or experience curve.
Saba Bahouth – UCO
2
Learning Curve Graph
Hours per unit, TN
120
100
80
60
40
20
0
0
100
TN = (T1) (N ln .90 / ln 2)
200
3
300
Units, N
400
Learning Curve Coefficients Table
Unit (N)
80%
85%
1
…
Unit
Time
1.000
Total
Time
1.000
Unit
Time
1.000
Total
Time
1.000
2
…
0.800
1.800
0.850
1.850
3
…
0.702
2.502
0.773
2.623
4
…
0.640
3.142
0.723
3.345
:
:
:
:
:
:
4
Example 1 – Refurbishing Planes
MaintAir has an order to refurbish the interior of 18 jet planes.
Such work has a learning rate of 80%. The first plane took
300 hours to refurbish.
•
What is the time needed to complete the fifth plane?
•
What is the time needed to complete the first five planes?
•
What is the time needed to complete planes 10 to 15?
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5
Example 2 – Assembling Kitchens
A building contractor asked our company to install the kitchens
in his 20-apartments building. The first kitchen will take us
80 hours to complete. How long will it take to complete
the 8th kitchen if the learning rate is 87%
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6
Example 3 – Determining the Learning Rate
Following is the data taken from a person assembling printers.
What is the learning rate for printers assembly?
Printer
Minutes
1
46
2
39
3
35
4
33
5
32
6
30
7
Example 4 – Distributing Mail
The mailman spent 5 hours distributing mail the last day of his
first week on the job (day 6). How long will it take him to
distribute the mail on Wednesday of the third week? Assume a
learning rate of 90%.
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8
Example 5 – Building Ships
You’re a planner for Viking Ships.
The first boat took 125,000 laborhours to make. Boats 2 & 3 were
produced with a learning factor of
85%. How long will the 4th boat
take so that raiding can begin?
9
© 1995 Corel Corp.
Solution for Example 5
Arithmetic (Basic):
Logarithmic:
Table:
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10
Learning Curve Applications
• Internal
– Determine labor standards
– Establish labor costs & budgets
– Scheduling
Aircraft Assembly (1925-57): 80%
• External
– Purchasing
– Subcontracting
Calculator (1975-78): 74%
• Strategic
– Determine volume-cost changes
– Evaluation of company and
industry performance
Heart Transplants (1985-88): 79%
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11
Examples of Learning Curve Effects
Example
Improving Parameter
Cumulative
Parameter
Learning
Curve
Slope (%)
Time
Frame
1. Model-T Ford production
Price
Units produced
86
19101926
2.Aircraft assembly
Direct labor-hours per unit
Units produced
80
19251957
3.Equipment maint. at GE
Average time to replace a
group of parts
Number of
replacements
76
Around
1957
4. Steel production
Production worker labor-hours
per unit produced
Units produced
79
19201955
5.Integrated circuits
Average price per unit
Units produced
72
19641972
6.Hand-held calculator
Average factory selling price
Units produced
74
19751978
7.Disk memory drives
Average price per bit
Number of bits
76
19751978
1-year death rates
Transplants
completed
79
19851988
8.Heart transplants
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Criticisms of Learning Curves
• Lack strong theoretical justification
• Intermingle variables
– Learning effects
– Economies of scale
– Technological improvements
• Focus on cost not profit
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13