Supplement 7

Learning Curves

McGraw-Hill/Irwin
Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.
 Supplement 7: Learning Objectives
● You should be able to:
1. Explain the concept of a learning curve
2. Make time estimates based on learning curves
3. List and briefly describe some of the main applications
of learning curves
4. Outline some of the cautions and criticisms of learning
curves
5. Estimate learning rates from data on job times

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 Learning Curves
● Learning curve
● The time required to perform a task decreases with
increasing repetitions
● The degree of improvement is a function of the task being
done
● Short, routine tasks will show modest improvement relatively
quickly
● Longer, more complex tasks will show improvement over a
longer interval

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 Learning

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 The Learning Effect
● The learning effect is attributed to a variety of factors:
● Worker learning
● Preproduction factors
● Tooling and equipment selection
● Product design
● Methods analysis
● Effort expended prior to the start of work
● Changes made after production has begun
● Changes in work methods
● Changes in tooling and equipment
● Managerial factors
● Improvements in planning, scheduling, motivation, and control

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 Interesting Characteristics of Learning
● The learning effect is predictable
● The learning percentage is constant
● Every doubling of repetitions results in a constant
percentage decrease in the time per repetition
● Typical decreases range from 10 to 20 percent

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 Learning Curves: On a Log-Log Graph

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Learning Percentage

● 90% learning percent means 10% decrease in

unit time with each doubling of repetition
● 80% learning percent means 20% decrease
in unit time with each doubling of
repetition
● Question: What does 100% learning percent
imply?
Learning Curves
 Learning Illustrated
● Each time cumulative output doubles, the time per unit for that
amount should be approximately equal to the previous time multiplied
by the learning percentage.
● If the first unit of a process took 100 hours and the learning rate is
90%:
Unit Unit Time (hours)
1 = 100
2 .90(100) = 90
4 .90(90) = 81
8 .90(81) = 72.9
16 .90(72.9) = 65.61
32 .90(65.61) = 59.049

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 Unit Times: Formula Approach

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 Example: Formula Approach
● If the learning rate is 90, and the first unit took 100
hours to complete, how long would it take to complete
the 25th unit?

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 Unit Times: Learning Factor Approach
● The learning factor approach uses a table that shows two
things for selected learning percentages:
● Unit value for the number of repetitions (unit number)

● Cumulative value, which enables us to compute the total

time required to complete a given number of units.

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 Example: Learning Factor Approach
● If the learning rate is 90, and the first unit took 100
hours to complete, how long would it take to complete
the 25th unit?

● How long would it take to complete the first 25 units?

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Learning Curves Example S-2

● A contract calls for the production of 20 jets.

The initial unit required 400 days of direct
labor. The learning percent is 80%.
 Learning Curves Example S-2

● Q1: Calculate the time of the 5th unit

● Approach 1 – using the formula

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 Learning Curves Example S-2

● Q1: Calculate the time of the 5th unit

● Approach 2
● using the learning Curve Coefficients table (7S-1, page 346)

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Learning Curves Example S-2

● Q2 – Expected time for the 20th jet

T20 = (400) X (.381) = 152.4 labor days
● Q3 – Expected total time for all 20 jets
T1-20 = (400) X (10.485) = 4,194 labor days
● Q4 – Average time per jet:
Average time = 4,194/20 = 209.7 labor days
Learning Curves Example

● Given T2 = 10 and 80% learning percent, find the

expected time for the 5th unit
T2 = 10 = T1 X (.8)
T1 = 10 / .8 = 12.5
T5 = 12.5 X 0.596 = 7.45
 Learning Curve Applications
● Useful application areas:
1. Manpower planning and scheduling
2. Negotiated purchasing
3. Pricing new products
4. Budgeting, purchasing, and inventory planning
5. Capacity planning

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 Cautions and Criticisms
1. Learning rates may differ from organization to
organization and by type of work
● Base learning rates on empirical studies rather than assumptions
where possible
2. Projections based on learning curves should be regarded
as approximations of actual times
3. Because time estimates are based on the first unit, care
should be taken to ensure that the time is valid
4. It is possible that at some point the curve might level off or
even tip upward

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 Cautions and Criticisms
5. Some of the improvements may be more apparent than
real: improvements in times may be caused by increases in
indirect labor costs
6. In mass production situations, learning curves may be of
initial use in predicting how long it will take before the
process stabilizes
● The concept does not usually apply because improvement in time
per unit is almost imperceptible

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 Cautions and Criticisms
7. Users of learning curves fail to include carryover effects
from previous experiences
8. Shorter product life cycles, flexible manufacturing, and
cross-functional workers can affect the ways in which
learning curves may be applied

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 Operations Strategy
● Learning curves have strategic implications for:
● Market entry when trying to rapidly gain market share
● As volume increases, operations is able to move quickly down
the learning curve
● Reduced cost  improved competitive advantage
● Useful for capacity planning
● Can lead to more realistic time estimates, thus leading to more
accurate capacity needs assessment

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