Learning Curve Theory: Application in the Context of Pizza Store Layout Simulation
Introduction
The principle of the learning curve theory is process improvement. The process improvement will occur as a result of the repetitive nature of the tasks. This improvement can occur on an individual level and on an organizational level. “Learning curve theory is based on three assumptions:
1. The amount of time required to complete a given task or unit of a product will be less each time the task is undertaken.
2. The unit time will decrease at a decreasing rate.
3. The reduction in time will follow a predictable pattern” (Chase, Jacobs, Aquilano, 2006).
The process performance data defined in the Pizza Store Layout Simulation is as follows:
Weeks No of Customers for Group of 2 No of Customers for Group of 4 Avg. Wait Time(Min) Avg. Queue Length Profit ($)
3-4 71 105 4.96 2.50 1,477
5-6 67 109 4.32 2.26 1,695
7-8 96 143 3.32 2.72 2,040
There is definite improvement in average waiting time for customers from weeks 3- 4 through weeks 7 – 8. It has decerased from 11.67 minutes in weeks 1 – 2 down to 3.32 minutes in weeks 7 – 8 after applying optimization strategies, implementing newer technology and removing the bottlenecks in the process. The approximate slope of the learning curve for week eight can be calculated by (11.67-3.32)/(8-0) = 1.04375, so the avaerage waiting time is decreasing by 1.04375/11.67 = 0.089439, which is about 0.09. We can say that the rate of learning is approximately 9% which means that it is a learning curve of about 91%.
Similar interpretations can be applied to the profit gained by the improvements in the process. There is a significant improvement of profit when comparing the first week of $1,054 to the eighth week of $2,040. Profit has increased to almost double from $1,054 to $2,040 at the end of the eigth week. The approximate slope of the learning curve for week eight can be calculated by ($2,040 -$1,054)/( 8-0) = $123.25, so profit is increasing by $123.25 each week. The percentage increase in profit is
The principle of the learning curve theory is process improvement. The process improvement will occur as a result of the repetitive nature of the tasks. This improvement can occur on an individual level and on an organizational level. “Learning curve theory is based on three assumptions:
1. The amount of time required to complete a given task or unit of a product will be less each time the task is undertaken.
2. The unit time will decrease at a decreasing rate.
3. The reduction in time will follow a predictable pattern” (Chase, Jacobs, Aquilano, 2006).
The process performance data defined in the Pizza Store Layout Simulation is as follows:
Weeks No of Customers for Group of 2 No of Customers for Group of 4 Avg. Wait Time(Min) Avg. Queue Length Profit ($)
3-4 71 105 4.96 2.50 1,477
5-6 67 109 4.32 2.26 1,695
7-8 96 143 3.32 2.72 2,040
There is definite improvement in average waiting time for customers from weeks 3- 4 through weeks 7 – 8. It has decerased from 11.67 minutes in weeks 1 – 2 down to 3.32 minutes in weeks 7 – 8 after applying optimization strategies, implementing newer technology and removing the bottlenecks in the process. The approximate slope of the learning curve for week eight can be calculated by (11.67-3.32)/(8-0) = 1.04375, so the avaerage waiting time is decreasing by 1.04375/11.67 = 0.089439, which is about 0.09. We can say that the rate of learning is approximately 9% which means that it is a learning curve of about 91%.
Similar interpretations can be applied to the profit gained by the improvements in the process. There is a significant improvement of profit when comparing the first week of $1,054 to the eighth week of $2,040. Profit has increased to almost double from $1,054 to $2,040 at the end of the eigth week. The approximate slope of the learning curve for week eight can be calculated by ($2,040 -$1,054)/( 8-0) = $123.25, so profit is increasing by $123.25 each week. The percentage increase in profit is
References: Chase, R. B., Jacobs, F. R., & Aquilano, N. J. (2006) Operations management for competitive advantage (11th ed). New York: McGraw Hill/Irwin. Retrieved October 21, 2009, from University of Phoenix, rEsource, OPS 571-Operations Management Course Web site. University of Phoenix (2009). Operations Management, Process Control and Problem Solving. Pizza Layout Simulation. Retrieved December 7, 2009, from University of Phoenix, Week two, rEsource. OPS 571—Operations Management Course Web site.