Ama Assignment Draft

Topics: Learning curve, Experience curve effects, Learning Pages: 6 (1531 words) Published: February 21, 2013
Introduction, including background of the learning curve and an overview of your chosen organization. (250 words) Learning curve is not a new management theory. It was observed by T.P. Wright in 1936 (Steven 2004b & Yelle 1979) but Steven (2010) surveyed that very few companies was using learning curve for management. It is not meant that learning curve is useless. Learning curve is not common because the non-users do not understand the concept of learning curve (Steven 2010).

By the way, the concept of learning curve is very simple. According to Kerzner (2009), Steven (2004b) & Yelle (1979) ,learning curve is found that the more same units in batch sizes is produced by the same person or group of people, the less cumulative producing time is used. Learning curve occurs because it is a human behavior that people are trend to learn from the previous mistakes and design the more efficient ways to complete tasks in less time after the task is done again and again. Although learning curve is not focused on reducing cost, it can increase the rate of time reduction and then reduce the labor cost. Hence, learning curve can forecast how fast the future cost would go down as the task is repeated.

Learning curve can be epitomized in a formula to evaluate the learning effect.

Learning curve can be used the equation calculate the rate of learning effect.

as a result of increasing or scaling up production facilities. The learning effect recognizes that the time taken to assemble a product reduces the more times that this product is made. It is consequently concerned with cumulative production over time, not the manufacture of a single product or batch at a particular moment.

The time required to perform a task decreases as the task is repeated. The rate of improvement has sufficient consistency to allow its use as a prediction tool.
learning curve would be utilized in a lot of different business such as mining, financial and service sectors. - The first step is to calculate the index of
learning, b, for the London Underground
contract using the learning curve equation
Yx = axb , where:
Yx = cumulative average time per unit
a = time to produce the first unit
x = cumulative number of units
b = index of learning
= log learning rate ÷ log 2

- impossible to continue down the
learning curve from the point reached at the
end of the previous contract:
l Extra learning may be needed if the products
for a proposed contract are slightly
different from those previously made.
l Work teams may have changed as a result
of labour turnover, promotion, retirement
or illness.
l The time lapse between contracts may
mean that it will take a little time for the
teams to get up to speed.

- It will therefore be necessary to take account
of these factors to derive realistic efficiency
levels. While this will involve a judgment based on experience, this judgment must be made to avoid underestimating the time required for a contract. I

- performance improves with experience

- learnt from your earlier mistakes and probably worked out a more efficient assembly method. That is the learning effect. The learning curve is not a cost reduction technique, since the model can accurately predict how much less time will be required to make something in the future.

- Budgets and standards must take account of the learning effect to provide reliable benchmarks against which to measure actual performance.

- many of today’s business sectors, including the service industry, exhibit the learning effect.

- the number of man hours to assemble planes decreased as more planes were produced.

- , the learning effect is not concerned with the fall in unit cost due to economies of scale. The learning effect recognises that the time required to make a product (or provide a service) reduces the more times it is made by the same person...
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