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Supplement 7 Learning Curves 1Saba Bahouth – UCO.

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1 Supplement 7 Learning Curves 1Saba Bahouth – UCO

2 Learning is the permanent change in behavior due to repetition. Types of learning: Individual and Organizational. Learning Curve effect first observed in 1936 in airplane industry. Learning Time needed to produce a unit decreases with each additional unit. Time needed decreases at a decreasing rate as cumulative production increases. Decrease in time follows an exponential curve called learning or experience curve. 2Saba Bahouth – UCO

3 Hours per unit, T N Units, N 90 % curve T N = (T 1 ) (N ln.90 / ln 2 ) Learning Curve Graph 80% curve 3

4 Learning Curve Coefficients Table Unit (N)80%85% Unit Time Total Time Unit Time Total Time 1… … … … :::::: 4

5 Example 1 – Refurbishing Planes MaintAir has an order to refurbish the interior of 18 jet planes. Such work has a learning rate of 80%. The first plane took 300 hours to refurbish. What is the time needed to complete the fifth plane? What is the time needed to complete the first five planes? What is the time needed to complete planes 10 to 15? 5Saba Bahouth – UCO

6 Example 2 – Assembling Kitchens A building contractor asked our company to install the kitchens in his 20-apartments building. The first kitchen will take us 80 hours to complete. How long will it take to complete the 8 th kitchen if the learning rate is 87% 6Saba Bahouth – UCO

7 Example 3 – Determining the Learning Rate Following is the data taken from a person assembling printers. What is the learning rate for printers assembly? PrinterMinutes

8 Example 4 – Distributing Mail The mailman spent 5 hours distributing mail the last day of his first week on the job (day 6). How long will it take him to distribute the mail on Wednesday of the third week? Assume a learning rate of 90%. 8Saba Bahouth – UCO

9 Youre a planner for Viking Ships. The first boat took 125,000 labor- hours to make. Boats 2 & 3 were produced with a learning factor of 85%. How long will the 4 th boat take so that raiding can begin? © 1995 Corel Corp. Example 5 – Building Ships 9

10 Solution for Example 5 Arithmetic (Basic): Logarithmic: Table: 10Saba Bahouth – UCO

11 Internal – Determine labor standards – Establish labor costs & budgets – Scheduling External – Purchasing – Subcontracting Strategic – Determine volume-cost changes – Evaluation of company and industry performance Learning Curve Applications Aircraft Assembly ( ): 80% Calculator ( ): 74% Heart Transplants ( ): 79% 11Saba Bahouth – UCO

12 Examples of Learning Curve Effects ExampleImproving ParameterCumulative Parameter Learning Curve Slope (%) Time Frame 1. Model-T Ford productionPriceUnits produced Aircraft assemblyDirect labor-hours per unitUnits produced Equipment maint. at GEAverage time to replace a group of parts Number of replacements 76Around Steel productionProduction worker labor-hours per unit produced Units produced Integrated circuitsAverage price per unitUnits produced Hand-held calculatorAverage factory selling priceUnits produced Disk memory drivesAverage price per bitNumber of bits Heart transplants1-year death ratesTransplants completed Saba Bahouth – UCO

13 Lack strong theoretical justification Intermingle variables – Learning effects – Economies of scale – Technological improvements Focus on cost not profit Criticisms of Learning Curves 13Saba Bahouth – UCO

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