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ACCA F5 Budgeting – Learning curves part b

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  3. Thank you sir for such great lectures
    But the way I did was like more complicated and time consuming but still I got 0.833333
    I did the reverse of the doubling method by making the learning effect as x and total time as y and for the second unit y+25.
    So 80x/100(average time) = y(total time for first unit)
    55x/100(average time) = y+25(total time for second unit)

    And then I substituted y with 80x/100 and found out x and got 0.8333

    Can this be a possibility??

  4. Hi, I’m a little confused with this question from the specimen CBE.

    The first phase of production has now been completed for the new car seat. The first unit actually took 12.5 hours to make and the total time for the first eight units was 34.3 hours, at which point the learning effect came to an end. Chair Co are planning on adjusting the price to reflect the actual time it took to complete the eighth unit.

    What was the actual rate of learning which occurred (to two decimal places)?

    They have shown the workings but I can’t calculate how they arrived at the answer. The equation throws me off when I get to 0.343 = r3

  8. Sir,

    I still dit not get the last bit tried a lot i know its silly but im stuck,,could you please help me?

    if first unit take 100 hours and the average time for 4 unit is 50 what is the learning rate?
    could you please show the calculation? 100
    .
    .
    50 ?

  9. At the end of this lecture – is the learning rate 37.5%?

    IE

    First unit – 100

    Fourth Unit – 50

    Average time – 100+50 /4 = 37.5

    37.5/100 = 37.5% learning curve effect

    thanks!

      • HI John

        Thank you for the quick reply.

        I’ve tried countless ways of doing this but can’t see how one could work their way back to get the learning rate.

        You’re saying the first unit takes 100 hours, and the third and fourth have an average rate of 50 hours (combined). This makes an unknown value to get to the second unit’s average time by the use of simple arithmetic, yes?

      • But the second unit does not have ‘an average time’!!

        Suppose the first unit take 100 hours and the second unit takes 50 hours. Then the average time per unit when they make two units is (100 + 50) / 2 = 75 hours.

        The learning rate applies to the average time per unit, so in this case the learning rate would be 75/011 = 0.75 or 75%

        I do suggest that you watch both of the lectures again.

      • Please watch the lecture again. I do not write that the time for the 4th unit is 50. I write that the average time if they make 4 units is 50 per unit. (This would be the total time for all 4 units divided by 4 to get the average time per unit).

        Then r^2 will be equal to 50/100.

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