Learning Curve Theory Overview
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Questions and Answers

What is the main characteristic of the work environment where learning curve theory is most applicable?

  • Highly mechanized processes
  • Work that is repetitive and not dictated by machinery (correct)
  • Work that requires constant innovation
  • Single-use tasks with no repetition

    • What happens to the cumulative average time per unit as output doubles on an 80% learning curve?

  • It remains constant
  • It increases by 20%
  • It decreases to 80% of the previous average time (correct)
  • It decreases by 20 hours

    • Under which condition would learning curve effects be less significant?

  • When tasks are repetitive but variable
  • When the workforce is inexperienced
  • When production is highly mechanized (correct)
  • When making items in large, consistent quantities

    • What is the incremental time required for the second unit produced when the first unit requires 100 hours on an 80% learning curve?

    <p>60 hours</p> Signup and view all the answers

    Which of the following features would NOT typically apply to a situation where learning curve theory is relevant?

    <p>Production processes that do not involve manual labor</p> Signup and view all the answers

    If the cumulative average time for the first four units produced is 64 hours each, what would be the total time required for those four units?

    <p>256 hours</p> Signup and view all the answers

    What is the concept termed when speed and efficiency improve through repeated performance?

    <p>Learning effect</p> Signup and view all the answers

    Why is the doubling of output significant in learning curve measurements?

    <p>It is when the cumulative average time typically decreases</p> Signup and view all the answers

    What is the total direct material cost for producing two boats?

    <p>P500,000</p> Signup and view all the answers

    How much is the labor cost for the second boat?

    <p>P120,000</p> Signup and view all the answers

    What will the total cost for the first four boats be?

    <p>P2,280,000</p> Signup and view all the answers

    Which of the following costs is influenced by the learning curve?

    <p>Direct labor time costs</p> Signup and view all the answers

    What is the profit mark-up applied to the cost of the first boat?

    <p>20%</p> Signup and view all the answers

    If the first eight boats are ordered together, what will the price per boat be?

    <p>P607,200</p> Signup and view all the answers

    What is the expected cumulative average time per boat when producing the fourth boat?

    <p>512 hrs</p> Signup and view all the answers

    Which of the following factors does not affect the learning curve?

    <p>Material costs</p> Signup and view all the answers

    How is the total cost for the third and fourth boats calculated?

    <p>P980,000 for both</p> Signup and view all the answers

    What is the incremental time added when moving from the second boat to the third boat?

    <p>480 hrs</p> Signup and view all the answers

    Study Notes

    Learning Curve Theory

    • Individuals working on repetitive tasks become more efficient and faster with experience.
    • The learning curve effect describes how faster work can be achieved by experiencing a job more times.
    • Learning curve theory applies to situations where work processes can be optimized by experience.
    • It is applicable for products:
      • Primarily made by labor effort, not automated
      • New or recent products, the learning process is expected to have an end
      • Complex products made in smaller quantities for specific orders.
    • The learning rate, or cumulative average time is the expected reduction in effort per unit produced.
    • The cumulative average time per unit reduces by a constant percentage with each doubling of production.
      • For example, an 80% learning rate means a 20% reduction in average time required per unit when production output doubles.
    • Learning curve theory can be used to calculate the marginal cost of extra units produced.
    • Learning curve theory plays a role in bidding on contracts.
    • The learning curve can help with preparing production budgets and setting standard costs.
    • The learning curve phenomenon does not always apply.

    Limitations of Learning Curve Theory

    • The learning curve assumes stable work conditions and motivation among employees.
    • Learning curve theory could be inaccurate due to labor turnover or changes in production techniques.
    • Accurate data may be difficult to collect and workers may not agree to the reduction in production times.

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    Description

    Explore the principles of Learning Curve Theory and its application in optimizing work processes through experience. This quiz delves into the effects of repetitive tasks on efficiency, the concept of learning rates, and how production output can influence costs. Perfect for understanding how experience shapes productivity in labor-intensive settings.

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