Learning Curve a Case

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Assignment 1: Learning Curve “A” Case

Understanding Learning Curves

Jenny Wilson is a buyer at Flextron, a manufacturer of large industrial pumps. She has a requirement for a customized subassembly that a preferred supplier, Vistral, is building for the first time. She is preparing for negotiation with Vistral, where a key issue will be the price of the subassembly. Given the unique nature of this subassembly, Jenny expects to incorporate into the contract price reduction targets based on learning curve estimates. While Jenny does not have specific data for Vistral, she has accumulated data for a subassembly that was similar in design and manufacturing complexity.

Total Labor Average Labor Learning
Units Hours per Unit Rate

1 6 ——— ******

2 10.8 ——— ———

4 19.2 ——— ———

8 35.2 ——— ———

16 64 ——— ———

32 115.2 ——— ———

64 211.2 ——— ———

128 384 ——— ———

Overall average improvement rate: ———

Applicable learning curve: ———

© Purchasing Management Association of Canada
Assignment Questions

For questions involving calculations, please show ALL of your work. Round your answers to 2 decimal places.

1. Given the above data, calculate the average labor per unit given the cumulative total labor hours provided.
Total Labour average Labour Learning
Units hours per unit rate

1 6 hrs 6 hrs
2 10.8 10.8/2 = 5.4 (6 – 5.4)/6*100 = 10% 4 19.2 19.2/4 = 4.8 (5.4 – 4.8)/5.4*100 = 11.11% 8 35.2 35.2/8 = 4.4...
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