LEARNING CURVES

INTRODUCTION
Learning curves are based on the premise that people
and organizations become better at their tasks as the
tasks are repeated.

INTRODUCTION
The learning curve is based on a doubling of production: That is,
when production doubles, the decrease in time per unit affects the
rate of the learning curve. So, if the learning curve is an 80% rate,
the second unit takes 80% of the time of the first unit, the fourth
unit takes 80% of the time of the second unit, the eighth unit
takes 80% of the time of the fourth unit, and so forth. This
principle is shown as:
T Ln = Time required for the nth unit
where T = unit cost or unit time of the first unit
L = learning curve rate
n = number of times T is doubled
If the first unit of a particular product took 10 labor-hours, and if a
70% learning curve is present, the hours the fourth unit will take
require doubling twicefrom 1 to 2 to 4. Therefore, the formula is
Hours required for unit 4 = 10 (.7)2 = 4.9 hours


UNDERLYING PRINCIPLES OF LEARNING CURVE

1. Each time you perform a task it

takes less time than the last time
you performed the same task.
2. The extent of task time decreases
over the time.
3. The reduction in time will follow a
predictable pattern.

ARITHMETIC APPROACH

As long as we wish to find the hours

required to produce N units and N is one of
the doubled values, then this approach
works. Arithmetic analysis does not tell us
how many hours will be needed to produce
other units. For this flexibility, we must
turn to the logarithmic approach.

Logarithmic Approach
The logarithmic approach allows us to
determine labor for any unit, TN, by the
formula:
TN = T1(Nb)

where TN = time for the Nth unit

T1 = hours to produce the first unit
b = (log of the learning rate)/(log 2) =
slope of the learning curve

Example problem
The learning rate for a particular
operation is 80%, and the first unit of
production took 100 hours. The hours
required to produce the third unit
may be computed as follows:
TN=T1(Nb)

T3=(100 hours)(3b)
=(100)(3log .8 / log2)
= (100)(3-.322)=70.2 labor/hour

Learning-Curve Coefficient
Approach
The learning-curve coefficient technique is
embodied in Table E.3 and the following
equation:
TN = T1C (E-3)
where TN = number of labor-hours required
to produce the Nth unit
T1 = number of labor-hours required to
produce the first unit
C = learning-curve coefficient found in the
next table.

Learning Coefficient Table

Example 1
It took a Korean shipyard 125,000 labor-hours to produce the
first of several tugboats that you expect to purchase for your
shipping company, Great Lakes, Inc. Boats 2 and 3 have been
produced by the Koreans with a learning factor of 85%. At $40
per hour, what should you, as purchasing agent, expect to pay
for the fourth unit?
First, search Table E.3 for the fourth unit and a learning factor of
85%. The learning-curve coefficient, C, is .723. To produce the
fourth unit, then, takes
TN=T1C
T4=(125,000 hrs)(.723)
=90,375 hours
To find the cost, multiply by $40:
90,375 hours $40 per hour = $3,615,000

Example 2
Computed the time to complete the fourth
tugboat that Great Lakes plans to buy. How
long will all four boats require?
Looking this time at the total time
column in Table E.3, we find that the
cumulative coefficient is 3.345. Thus, the
time required is
TN = T1C
T4 = (125,000)(3.345) = 418,125 hours in
total for all 4 boats

CAUTIONS AND CRITICISM

1. Learning rates may differ from organization to
organization
2. Projections based on learning curves should be
viewed as approximations
3. Estimates based the first unit should be checked for
valid times
4. At some point the curve might level off the even tip
upward
5. Some improvements may be more apparent than
real
6. For the most part, the concept does not apply to
mass production