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Chapter 18. Learning Curves > GRAPHIC REPRESENTATION

18.3. GRAPHIC REPRESENTATION

Figure 18-1 shows the learning curve plotted from the data in Table 18-1. The horizontal axis represents the total number of units produced. The vertical axis represents the total labor hours (or cost) for each unit. The labor-hour graph in Figure 18-1 represents a hyperbola when drawn on ordinary graph paper (i.e., rectangular coordinates). The curve shows that the difference or amount of labor-hour reduction is not consistent. Rather, it declines by a continuously diminishing amount as the quantities are doubled. But the rate of change or decline has been found to be a constant percentage of the prior cost, because the decline in the base figure is proportionate to the decline in the amount of change. To illustrate this, we can use the data in Table 18-1, which was used to construct Figure 18-1. In doubling production from the first to the second unit, a reduction of 203 hours occurs. In doubling from 100 to 200 units, a reduction of 30 hours occurs. However in both cases, the percentage decrease was 25 percent. Again, in going from 400 to 800 units, a 25 percent reduction of 17 hours results. We can therefore conclude that, as more units are produced, the rate of change remains constant but the magnitude of the change diminishes.

Figure 18-1. A 75 percent learning curve.



  

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