Supplement Learning Curves McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc All Rights Reserved Supplement 7: Learning Objectives • You should be able to: – Explain the concept of a learning curve – Make time estimates based on learning curves – List and briefly describe some of the main applications of learning curves – Outline some of the cautions and criticisms of learning curves – Estimate learning rates from data on job times 7S-2 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 7S-3 Learning 7S-4 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 7S-5 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 7S-6 Learning Curves: On a Log-Log Graph 7S-7 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) = 100 90(100) = 90 90(90) = 81 90(81) = 72.9 16 90(72.9) = 65.61 32 90(65.61) = 59.049 7S-8 Unit Times: Formula Approach Tn T1 n b where Tn Time for nth unit T1 Time for first unit ln r b ln r learning rate percentage ln stands for the natural logarithm 7S-9 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? T25 100 25 ln 90 ln 100 25 15200 61.3068 hours 7S-10 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) Tn T1 Unit time factor – Cumulative value, which enables us to compute the total time required to complete a given number of units T n T1 Total time factor 7S-11 Learning Factor Table 7S-12 Learning Curve Applications • Useful application areas: – Manpower planning and scheduling – Negotiated purchasing – Pricing new products – Budgeting, purchasing, and inventory planning – Capacity planning 7S-13 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 7S-14 ... in the time per repetition – Typical decreases range from 10 to 20 percent 7S-6 Learning Curves: On a Log-Log Graph 7S -7 Learning Illustrated • Each time cumulative output doubles, the time per... 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) = 100 90(100) = 90 90(90) = 81 90(81) = 72 .9 16 90 (72 .9)... Capacity planning 7S-13 Operations Strategy • Learning curves have strategic implications for: – Market entry when trying to rapidly gain market share • As volume increases, operations is able