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SUPPLEMENT D l Learning Curve Analysis

SUPPLEMENT D: LEARNING CURVE ANALYSISTRUE/FALSE

1. A line called a learning curve can represent the learning effect.

True (The Learning Effect, easy)

2. The first learning curve was developed by the aircraft industry.True (The Learning Effect, moderate)

3. One use of learning curves is for financial planning.True (Using Learning Curves, moderate)

MULTIPLE CHOICE

4. Which of the following statements about learning curves is generally T !"#a. $anagement can decide to achieve a certain rate of learning.

b. %earning curves were first &uantified by the !.'. (ostal 'ervice.c. !sing the )doubling) model* a learning curve with a rate of learning of +, -* means the 1,th

unit ta es +, - of the time that the 2,th unit will ta e.d. %earning curves are a recognition of the concept that the time a tas ta es usually decreases

with e/perience.d (The Learning Effect, moderate)

0. Which one of the following statements about learning curves is T !"#a. A learning curve assumes that the direct labor re&uirements per unit will decrease at an

increasing rate as cumulative production increases. b. %earning at a capital intensive operation usually will be less than it is for a labor intensive

operation.

c. %earning for a simple product will usually be greater than it is for comple/ products.d. %earning curves can be used only for individuals* not for the whole organi ation.b (Multiple sections, moderate)

. Which one of the following statements is T !" about the relationship between learning curves andcompetitive strategy#a. nowing where your process is on the learning curve will enable you to ma e fre&uent product

modifications. b. 5irms that emphasi e low cost in their competitive strategy strive to move down the learning

curve by increasing volume.c. %earning curves enable managers to pro6ect fi/ed manufacturing costs for future production

&uantities.

d. (ro6ecting the impact of learning curves into the future is one effective way of reducing theimpact of environmental uncertainty.

b (Multiple sections, moderate)

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+. Which one of the following is an assumption of learning curves#a. The cumulative time of production decreases as production increases.

b. Time reduction per unit increases as cumulative production increases.c. The same learning curve should be used when a company increases its level of automation.d. The reduction in time per unit follows an e/ponential curve.d (Multiple sections, moderate)

7. Which one of the following statements is 8OT a typical assumption related to developing learningcurves#a. The total direct labor hours needed to produce the first 1,, units will be double the amount of

hours needed to build the first 0, units. b. The direct labor needed per unit will decrease at a declining rate as cumulative production

increases.c. The direct labor hours per unit will decrease according to an e/ponential curve as cumulative

production increases.d. The direct labor needed to produce the 0,th unit will always be more than the direct labor

needed to produce the 01st unit.a (Developing Learning Curves, moderate)

9. !nder learning curve theory* with a learning rate of +, -* thea. time to produce the second unit will be +, - less than the time to produce the first unit.

b. time to produce the second unit will be 3, - less than the time to produce the first unit.c. cumulative average time per unit after producing the first 1,, units will be +, - less than the

average time per unit of the first 0, units.d. average time per unit will be cut in half for every +, units.b (Developing Learning Curves, moderate)

1,. Which one of the following statements about learning curves is 5A%'"#a. The direct labor for the n:1st unit will always be less than the direct labor re&uired for the nth

unit.

b. The reduction in time will follow an e/ponential curve.c. A benefit of learning curves is that they are unaffected by factors such as product comple/ity

and the rate of capital additions.d. The cumulative average number of direct labor hours per unit for a given product after the 1,th

unit with an 7, - learning rate will be less than that for the same product with a +, - learningrate.

c (Developing Learning Curves, moderate)

11. ;iven that the first unit of a product too 272 hours to build and the learning rate is e/pected to be7, -* how much time will it ta e to build the 4,th unit#a. %ess than or e&ual to +9

b. ;reater than +9 but less than or e&ual to 73

c. ;reater than 73 but less than or e&ual to 7+d. ;reater than 7+c (Developing Learning Curves, moderate)

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SUPPLEMENT D l Learning Curve Analysis

12. odia has 6ust begun production of a new government contract for 1,,, infrared cameras. Thefirst camera too 0,, hours to produce.

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SUPPLEMENT D l Learning Curve Analysis

1+. ;iven that the 3rd unit too 1,, minutes and the rate of learning is 7, -* how much time will itta e to build the 9 th unit#a. %ess than or e&ual to 3, minutes

b. ;reater than 3, minutes but less than or e&ual to 30 minutesc. ;reater than 30 minutes but less than or e&ual to 4, minutesd. ;reater than 4, minutesb (Developing Learning Curves, difficult)

17.

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SUPPLEMENT D l Learning Curve Analysis

23. ?B Company has recently started production of a new product.

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27. The production for a new product followsD

The first unit will ta e 1,,, hours to produce and the learning rate is 9, -.

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SHORT ANSWERS

32. What are the three ma6or assumptions of the learning curve#!" Direct labor re#uired for the n$!st unit %ill al%ays be less than that re#uired for the nthunit" &" Direct labor re#uirements %ill decrease at a declining rate as cumulative productionincreases" '" eductions in time %ill follo% an e ponential curve" (Developing LearningCurves, moderate)

33. @ow are learning curves useful in bid preparation#Learning curves help estimate the cost of labor for bid preparation" (Using LearningCurves, moderate)

34. A manager of a company producing computer chips nows that in the early stages of production for a new product the e/penditures e/ceed receipts whereas in the latter stages the reverse is true. ;ivean e/planation for this phenomenon.rom the learning curve theory, the direct labor costs %ill e ceed the average in the earlystages of production %hereas the reverse is true in the latter stages" *ricing is often predictedon average costs" (The Learning Effect, moderate)

30. Why is the learning rate more pronounced for comple/ products than for simple products#Comple products offer more opportunity for improving %or+ methods, materials, andprocesses" (Managerial Consideration in the use of Learning Curves, moderate)

PROBLEMS

3 . The estimated time to produce the first unit is 7 hours.

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