Learning Curve
LEARNING CURVE CONCEPT AND ITS USEFULNESS IN MANAGEMENT DECISIONS
Presented ByKriti Agarwal (A002) Aniket Rane(A046) Nitin Gupta(A024) Eshan Singh(A057) Mayank Bhatia(A013)
HISTORY
Introduced to the aircraft industry in 1936 by T. P. Wright in his article Journal of the Aeronautical Science He found that per unit production time reduced at an unvarying rate Since then, learning curves (also known as progress functions) have been applied to all types of work
INTRODUCTION
A graphical representation of the changing rate of learning (in the average person) for a given activity or tool The underlying hypothesis is that the direct labor man-hours necessary to complete a unit of production will decrease by a constant percentage each time the production quantity is doubled
EXAMPLE
FUNDAMENTAL PROPERTIES
As the number of completed tasks increases: time taken to complete a task decreases time savings from one task to another decreases amount of improvement decreases
ASSUMPTIONs
That the task is repetitive That only manual labour is involved and there is no automation of processes. That staff are fully motivated and there are no constraints. That no labour turnovers occurred for a long time That the products and processes are standardised, no midway modification. There must be continuous production- no stoppage That repetitive process will increase production
FACTS ABOUT LEARNING CURVE…
• Learning applies to people, machinery, systems • Learning Curve is similar to Experience curve but
former applies more to whole organisation.
• Learning Curve is based on empirical evidences. • 80% learning curve usually assumed
WHERE CAN WE APPLY learning curve?
• • • • • • • • • • • •
New Product Production Costs Make or Buy Decisions Suppliers Progress Payments Analyze Pricing Practices of Suppliers Cost-Volume-Profit (CVP) Analysis Evaluation of Production Employees Multi-Year Procurement Analysis Production Rate Evaluation Production Improvement
Presented ByKriti Agarwal (A002) Aniket Rane(A046) Nitin Gupta(A024) Eshan Singh(A057) Mayank Bhatia(A013)
HISTORY
Introduced to the aircraft industry in 1936 by T. P. Wright in his article Journal of the Aeronautical Science He found that per unit production time reduced at an unvarying rate Since then, learning curves (also known as progress functions) have been applied to all types of work
INTRODUCTION
A graphical representation of the changing rate of learning (in the average person) for a given activity or tool The underlying hypothesis is that the direct labor man-hours necessary to complete a unit of production will decrease by a constant percentage each time the production quantity is doubled
EXAMPLE
FUNDAMENTAL PROPERTIES
As the number of completed tasks increases: time taken to complete a task decreases time savings from one task to another decreases amount of improvement decreases
ASSUMPTIONs
That the task is repetitive That only manual labour is involved and there is no automation of processes. That staff are fully motivated and there are no constraints. That no labour turnovers occurred for a long time That the products and processes are standardised, no midway modification. There must be continuous production- no stoppage That repetitive process will increase production
FACTS ABOUT LEARNING CURVE…
• Learning applies to people, machinery, systems • Learning Curve is similar to Experience curve but
former applies more to whole organisation.
• Learning Curve is based on empirical evidences. • 80% learning curve usually assumed
WHERE CAN WE APPLY learning curve?
• • • • • • • • • • • •
New Product Production Costs Make or Buy Decisions Suppliers Progress Payments Analyze Pricing Practices of Suppliers Cost-Volume-Profit (CVP) Analysis Evaluation of Production Employees Multi-Year Procurement Analysis Production Rate Evaluation Production Improvement