curve concept or method of data accumulation is selected for use, based on suitability to the experience pattern, the data should be applied consistently in order to render meaningful information to management. Consistency in curve concept and data accumulation cannot be overemphasized, because existing experience curves play a major role in determining the project experience curve for a new item or product.

When selecting the proper curve for a new production item when only one point of data is available and the slope is unknown, the following, in decreasing order of magnitude, should be considered.

• Similarity between the new item and an item or items previously produced.

• Physical comparisons

• Addition or deletion of processes and components

• Differences in material, if any

• Effect of engineering changes in items previously produced

• Duration of time since a similar item was produced

• Condition of tooling and equipment

• Personnel turnover

• Changes in working conditions or morale

• Other comparable factors between similar items

• Delivery schedules

• Availability of material and components

• Personnel turnover during production cycle of item previously produced

• Comparison of actual production data with previously extrapolated or theoretical curves to identify deviations

It is feasible to assign weights to these factors as well as to any other factors that are of a comparable nature in an attempt to quantify differences between items. These factors are again historical in nature and only comparison of several existing curves and their actuals would reveal the importance of these factors.

If at least two points of data are available, the slope of the curve may be determined. Naturally the distance between these two points must be considered when evaluating the reliability of the slope. The availability of additional points of data will enhance the reliability of the curve. Regardless of the number of points and the assumed reliability of the slope, comparisons with similar items are considered the most desirable approach and should be made whenever possible.

A value for unit one may be arrived at either by accumulation of data or statistical derivation. When production is underway, available data can be readily plotted, and the curve may be extrapolated to a desired unit. However, if production has yet to be started, actual unit-one data would not be available, and a theoretical unit-one value would have to be developed. This may be accomplished in one of three ways:

• A statistically derived relationship between the preproduction unit hours and first unit hours can be applied to the actual hours from the preproduction phase.

• A cost estimating relationship (CER) for first-unit cost based on physical or performance parameters can be used to develop a first-unit cost estimate.

• The slope and the point at which the curve and the labor standard value converge are known. In this case, a unit-one value can be determined. This is accomplished by dividing the labor standard by the appropriate unit value.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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