learning curves

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  • #243985

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    This forum is restricted to members of the associated course(s).

    Mahmoud Elkhatib
    Participant

    in learning curve topic :

    what is the elements will effect on the learning curves , i mean the percentage of learning will reduce from 100 % to 80 % based on which elements of learning in the company production operation . 

    for example :

    A learning rate of 1.00 or 100% is equivalent to no learning taking place. However, because learning
    did take place and the learning curve was 80%, the time required to produce the first car was 10 hours,
    and the time required to produce the second car was 6 hours, for a total of 16 hours for both (80% of 20
    hours). The cumulative average time per unit for the first two cars was 8 hours for each car.

     

    on the above case we learned 20% , which caused a reduction with the production hours 2 hours for the first 2 units  , how the company will increase a learning standard to maintain the improvement in production time for each unit and what is the maximum learning the company can reached ?

     

     

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  • #243991

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    Lynn Roden
    HOCK international

    Hello Mahmoud Elkhatib,

    What affects the learning curve, what elements of learning are involved, and even what amount of learning percentage can be expected for a process are things that would be determined by the engineers who develop the production process and the production managers who manage it, and of course it will be different for every process. That is not something that a management accountant can determine on their own. An accountant would probably be involved in the discussions because the learning curve would be used in setting standards and the standards would be used in accounting for the production and developing bids. But the accountant would not have the specialized knowledge needed to decide what the learning curve percentage should be or what kind of training of production employees would be needed to make it happen.

    As your CMA Part 1, Vol. 1 textbook says:

    “The learning curve percentage will always be greater than 50% and less than 100%.

    “The learning curve will always be less than 100%, because if the learning curve is 100% then no learning and no decrease in time required is taking place.

    “The learning curve percentage must be greater than 50%. If the learning curve percentage is less than or equal to 50%, it would mean one of two impossible scenarios exists:

    • If the learning curve is less than 50%, the total time required to produce the additional units when production doubles plus the time required to produce the initial units would be less than the time required for production of the initial units.
    • If the learning curve is equal to 50%, the total time required to produce the additional units when production doubles plus the time required to produce the initial units would be equal to the time required for production of the initial units.

    “Neither of the two scenarios above is possible. The additional units must require some added amount of time, so the total time for the additional units plus the time for the initial units must be greater than the time required for the initial units.”

    Lynn

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