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I know I have posted here before about Learning curve analysis….
I cant seem to figure out how to use the equation!!!
y=axb
do you multiply cost by units and then multiply by log?
can someone put a step by step guide on here for how to use everything, especially b
Regards
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Should be y = ax^b
Give you an example, a product requires 20 hrs of labour per unit at a cost of $6 per hour. A traditional labour standard would expect 4 units to be produced in 80 hrs at a labour cost of $480. If a 90% learning curve effect applies, then one would expect the 4 units to be completed in less time. How long will they require?
Answer: from your formula, you know that a = 20 hours, x = 4 units, so the things left is to find b. The formula given for b is log LR/ log 2, LR is the rate, so b = log 0.9/log 2, press from your calculator. Finally combine and y = 20 x 4 x (log 0.9/log 2) = 16 hours. Therefore, 4 units of the product will require 4 x 16 = 64 hours. The standard hour of 80 will also be replaced with 64 hours 🙂
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