Question

why are learning curves important?

Answer 1

Learning curve plots the relationship between cost of production and the output produced over a period of time. This relationship becomes stronger with time, i.e. the system takes less time as we move ahead in production as the system has already learnt the process of production. A steep learning curve depicts that the process is not repetitive and may be difficult to learn/ understand.

For example:

If Learning rate = 75%

b= log learning rate / log 2 = log 0.75 / log 2 = -0.415

Time taken to learn and execute production of First unit t₁= 250 hrs

Time taken to execute production of Tenth unit t₁₀= t₁ * n^b = 250 * (10)^(-0.415) = 96.148 hrs

So, we can see the considerable reduction in time as the production process proceeds in its flow. This means the system has learnt and got accustomed to the process.

Learning curve can be used in the following business processes:

• Work and project scheduling: Work scheduling gets facilitated by learning curve and becomes easier to draft and interpret
• Material requirement planning: When employees get accustomed to the work at hand, their learning increases and then they produce more in same amount of time
• Cost estimation: Learning curve facilitates cost projection
• Training programme: The effectiveness and impact of training programme can be validated with the help of learning curve