Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 56

Learning Curves Ben Matthews and David Everhart work for a landscaping company in Twin Cities, Oklahoma. Their principal job is to lay railroad ties to line the sidewalks around apartment complexes and to install flower boxes. The first time Ben and David undertook one of these projects, they spent 17 hours. Their goal by the end of the summer was to be able to finish an apartment complex in 8 hours, one working day. They performed eight of these jobs and had an 80 percent learning curve. Assume that all apartment complexes are approximately the same size.

Required Did they reach their goal? If not, what would the learning rate have to have been for them to have accomplished their goal?

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Learning Curve:

Learning curve is the analysis of recurring cost the show relation among cost and output over a period of time, in case of repetitive tasks of a worker or employee. This theory is generally used in production process orassembly process, where a worker is doing the same job again and again. When a worker does the same job again and again, gradually the time taken by the worker per unit of work will reduce, such reduction is called learning curve effect.