Key Words Associated With Learning Curves

Understanding a few key phrases will help in utilizing learning curve theory:

• Slope of the curve. A percentage figure that represents the steepness (constant rate of improvement) of the curve. Using the unit curve theory, this percentage represents the value (e.g., hours or cost) at a doubled production quantity in relation to the previous quantity. For example, with an experience curve having 80 percent slope, the value of unit two is 80 percent of the value of unit one, the value of unit four is 80 percent of the value at unit two, the value at unit 1000 is 80 percent of the value of unit 500, and so on.

• Unit one. The first unit of product actually completed during a production run. This is not to be confused with a unit produced in any reproduction phase of the overall acquisition program.

• Cumulative average hours. The average hours expended per unit for all units produced through any given unit. When illustrated on a graph by a line drawn through each successive unit, the values form a cumulative average curve.

• Unit hours. The total direct labor hours expended to complete any specific unit. When a line is drawn on a graph through the values for each successive unit, the values form a unit curve.

• Cumulative total hours. The total hours expended for all units produced through any given unit. The data plotted on a graph with each point connected by a line form a cumulative total curve.

The greatest benefit of learning curves lies in the story they tell when plotted on loglog paper. As an example, consider the learning curve in Figure 18-3, which shows the pricing for the Ford Model T. Other typical relationships can be seen in Figure 18-4.

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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