Operations management by stevenson 9th student slides supplement 7

Supplement 7
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)

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

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 2
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 2

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