Operations management by stevenson 9th student slides supplement 7

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