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Chapter 4 - Learning Curves

Most workers become more proficient at tasks the more they perform them, following a learning curve where time per unit declines by a constant percentage each time total units double. This phenomenon is observed in long production cycles like construction. The learning curve model states time per unit is reduced by a fixed learning rate percentage each time cumulative output doubles. For example, with an 80% learning rate, time is reduced to 80% of the previous average when output doubles. Learning curves apply if a process is labor intensive, without breaks in production, for a new complex repetitive product.

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20 views12 pages

Chapter 4 - Learning Curves

Most workers become more proficient at tasks the more they perform them, following a learning curve where time per unit declines by a constant percentage each time total units double. This phenomenon is observed in long production cycles like construction. The learning curve model states time per unit is reduced by a fixed learning rate percentage each time cumulative output doubles. For example, with an 80% learning rate, time is reduced to 80% of the previous average when output doubles. Learning curves apply if a process is labor intensive, without breaks in production, for a new complex repetitive product.

Uploaded by

Jeremiah Ncube
Copyright
© © All Rights Reserved
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Download as PPTX, PDF, TXT or read online on Scribd
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Learning curves

JEFFRY NDHLOVU BSC (HONS) ACCOUNTANCY, MPHIL,


ACCA
Introduction
Most workers become more proficient at their task the more they do them. Learning takes place
especially through the early stages of the job e.g contractors constructing a high rise apartment
building find the 20th storey that go on faster than the 8th storey. The learning curve represents
that the time spent per unit declines by a constant percentage as the number of units produced
doubles. The phenomenon has been observed where new long-term production activities are
undertaker / where a long production cycle is conducted such as building construction projects,
plan manufacture and ship building.
Cont
Selling prices and workforce needs, as well as standards for time, can be compared from such an
analysis. Care is needed, however, because management practices, design, production
technology, and quality requirements can interfere with the actual time spent by employees.
Behavioural considerations can also affect learning. Factors such as peer pressure, union-
imposed constraints, and the state of management-worker relationships can affect productivity
and limit learning. The learning curve model states that each time the number of units produced
doubles, the cumulative average time per unit is reduced by a constant percentage
Wright law
As cumulative output doubles, the cumulative average time per unit falls to a fixed percentage
[referred to as the learning rate] of the previous average time.
THE LEARNING RATE:
CUMULATIVE AVERAGE TIME
{C.A.T}
In learning theory, the cumulative average time per unit produced is assumed to decrease by a
constant % every time total output of the product doubles.
EXAMPLES
Where an 80% learning effect occurs, the cumulative average time required /unit is reduced to
80% of the previous cumulative when output is doubling of output produces a 20% decrease in
C.A.T.
EXAMPLE 1 an 80% LEARNING
CURVE.
The first unit of a new product requires 100hrs .An 80% learning curve applies .`How much time
would it take to produce 16 units?
Learning curve graph
Example 2
Angwa Ltd has been requested to supply 8 units of a new product to the customer’s
specification .The estimated labour time for the first unit is 25hrs and the labour cost is $10/hr.
Assume a learning curve of 90%.

a. Calculate the labour cost for the order.


B.Calculate the labour cost of a second order with the same quantity (8 units).
The learning curve and the steady curve
The learning effect will only apply for a certain range of production. Once the steady state is
reached, the direct labour hours will not reduce any further and this will become the basis on
which the budget is produced.
LIMINATION OF THE LEARNING
CURVE MODEL
The learning, whilst being an important factor to be taken into account, if it exists, is based on
specific assumptions which may or may not apply in a modern manufacturing environment.
The model applies if the process is;
labour intensive
No breaks in production.
a new product being developed
complex
repetitive
It may also be difficult to identify the learning curve effect in practice
Learning curve model
The learning curve can be expressed in a form of an equation as;
y = ax ^(b)

Where y = cumulative average time per unit (C. A. T)


x = cumulative total number of units produced
a = time taken to produce the first unit
b = index of learning [log LC/Log 2] i.e [-0, 3219 for a Lc of 80%

The method can be used to calculate y values for the data straight away.

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