Deck 26: Supplement I Learning Curve Analysis

Question 1

The learning effect can be represented by a line called a learning curve.

Answer 1

True

Question 2

Once the learning curve has flattened, i.e., reached a mostly horizontal shape, the per-unit time could be described as ________.

Answer 2

standard time

Question 3

The first learning curve was developed by the aircraft industry.

Answer 3

True

Question 4

One assumption about learning curves is that the reduction in time will increase as output increases.

Question 5

Which one of the following statements is True about the relationship between learning curves and competitive strategy?

A) Knowing where your process is on the learning curve will enable you to make frequent product modifications.
B) Firms that emphasize low cost in their competitive strategy strive to move down the learning curve by increasing volume.
C) Learning curves enable managers to project fixed manufacturing costs for future production quantities.
D) Projecting the impact of learning curves into the future is one effective way of reducing the impact of environmental uncertainty.

Question 6

Which one of the following statements about learning curves is False?

A) The direct labor for the n+1st unit will always be less than the direct labor required for the nth unit.
B) The reduction in time will follow an exponential curve.
C) A benefit of learning curves is that they are unaffected by factors such as product complexity and the rate of capital additions.
D) Using industry averages for learning curves can be risky because the type of work and competitive niches can differ from firm to firm.

Question 7

The annual report for Luddite Corporation boasted of their ERP implementation and noted that, "while there were initially some growing pains, our learning rate for this system has been calculated at 100%." What are the implications of this statement?

A) Luddite Corporation is twice as fast processing transactions now.
B) Luddite Corporation is twice as slow processing transactions now.
C) Luddite Corporation processes transactions at the same rate now.
D) Luddite Corporation processes transactions instantaneously (takes zero time) now.

Question 8

The first unit took fifteen days to finish and the second unit was finished a mere 13.5 days later. How many more days will pass before the tenth unit is finished?

A) 91.5
B) 119.9
C) 109.3
D) 129.5

Question 9

A business that relies on learning effects to achieve their strategic objectives is most likely in a ________ volume ________ variety production sector.

Question 10

Which of the following statements about learning curves is generally True?

A) Management can decide to achieve a certain rate of learning.
B) Learning curves were first quantified by the U.S. Postal Service.
C) Using the "doubling" model, a learning curve with a rate of learning of 70 percent means the tenth unit takes 70 percent of the time that the twentieth unit will take.
D) Learning curves are recognition of the concept that the time a task takes usually decreases with experience.

Question 11

The first unit took fifteen days to finish and the second unit was finished a mere 13.5 days later. How long will it take to finish the eighth unit?

A) 10.7 days
B) 10.9 days
C) 10.5 days
D) 11.1 days

Question 12

Which one of the following statements is not a typical assumption related to developing learning curves?

A) The total direct labor hours needed to produce the first 100 units will be double the amount of hours needed to build the first 50 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 exponential curve as cumulative production increases.
D) The direct labor needed to produce the 50th unit will always be more than the direct labor needed to produce the 51st unit.

Question 13

A task that obeys learning effects will, in general, have a positive result to the equation tn₊₁tn, where tn is the completion time of the nth unit.

Question 14

One assumption about learning curves is that the reduction in time obeys a normal distribution.

Question 15

Under learning curve theory, with a learning rate of 70 percent, the:

A) time to produce the second unit will be 70 percent less than the time to produce the first unit.
B) time to produce the second unit will be 30 percent less than the time to produce the first unit.
C) cumulative average time per unit after producing the first 100 units will be 70 percent less than the average time per unit of the first 50 units.
D) average time per unit will be cut in half for every 70 units.

Question 16

The first two units took 28.5 days to finish and the subsequent two units took 24.8431 days to complete. What is the learning rate?

A) 80%
B) 85%
C) 90%
D) 95%

Question 17

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 exponential curve.

Question 18

Centurion Processing finishes the first unit in 100 hours and learns at a 75% rate. Their competitor, Ochenta Incorporated, completes their first unit in 80 hours but learns at an 80% rate. If they match total output with each other how many more units must each fierce rival make before Centurion is faster than Ochenta?

A) four more
B) six more
C) eight more
D) ten more

Question 19

An 80% learning rate means that the time falls by 20% at each doubling of output.

Question 20

Centurion Processing finishes the first unit in 120 hours and learns at a 70% rate. Their competitor, Ochenta Incorporated, completes their fist unit in 80 hours but learns at an 80% rate. If they match total output with each other how many units must each fierce rival make before Centurion's cumulative processing time is lower than Ochenta's?

A) 30 units
B) 33 units
C) 36 units
D) 39 units

Question 21

It took 100 hours to produce the first unit and 95 hours to produce the second unit. How many hours are required to produce the eighth unit? [Note: a calculator is required to answer this question.]

A) fewer than or equal to 60 hours
B) greater than 60 hours but fewer than or equal to 75 hours
C) greater than 75 hours but fewer than or equal to 90 hours
D) greater than 90 hours

Question 22

Tim usually exhibits an 80% learning rate for the mechanical tasks he undertakes. His next big project, the fence along the street, will require 35 iterations of the fencepost task. If he has 80 hours available to work on the project, how fast must he perform the first iteration in order to finish all 35 within his allotted time?

Question 23

The fifth unit took 36.3406 hours to produce and the eighth unit took only 32.549 hours. If the producer, who shall remain nameless (for obvious reasons) learns at a constant rate, how long did the first unit take?

A) 49 hours
B) 53 hours
C) 57 hours
D) 61 hours

Question 24

A contractor is preparing a bid to install swimming pools at a new housing addition. The estimated time to build the first pool is 35 hours. The contractor estimates a 90 percent learning rate; what is the estimated time to install all 30 pools?

Question 25

It took 100 hours to produce the first unit and the learning rate is 80 percent. How much time will it take to produce units 16 through 20?

A) fewer than or equal to 160 hours
B) greater than 160 but fewer than or equal to 170 hours
C) greater than 170 but fewer than or equal to 180 hours
D) greater than 180 hours

Question 26

A company is introducing a new product. The first unit took 1,000 hours to complete, and the fourth unit took 750 hours to complete. What is the rate of learning for this product?

A) less than 40 percent
B) greater than or equal to 40 percent but less than 60 percent
C) greater than or equal to 60 percent but less than 80 percent
D) greater than 80 percent

Question 27

The estimated time to produce the first unit is 100 hours. If a 90 percent learning rate is applicable, what is the estimated time of producing the first ten units?

Question 28

Two contract labor companies are competing for work being outsourced by Febrero SpA. One contractor, Terza, has a learning rate governed by a tripling of output at a 90% rate and the other contractor, Segundo, has a learning rate governed by the conventional doubling of output at a 90% rate. Both Terza and Segundo take 20 minutes to complete the first unit they are given for bid estimation purposes. How many more units must Terza make than Segundo before their time per unit drops below 15 minutes? [Note: a calculator is required to answer this question.]

Question 29

Case I.1
The production schedule for a new product follows.

The first unit took 100 hours to complete, and the rate of learning is 80 percent. Each employee works 40 hours per month.
Using the information in Case I.1, how much time will it take to produce the units in month 1?

A) fewer than 800 hours
B) greater than or equal to 800 hours but fewer than 1,100 hours
C) greater than or equal to 1,100 hours but fewer than 1,500 hours
D) greater than 1,500 hours

Question 30

The learning rate depends on factors such as ________ and ________, while replacing direct labor hours with _________ alters the learning rate, giving less opportunity to make reductions in the required hours per unit.

Question 31

Tim usually exhibits a 90% learning rate for the mechanical tasks he undertakes. His next big project, the fence along the street, will require 24 iterations of the fencepost task. If he has 40 hours available to work on the project, how fast must he perform the first iteration in order to finish all 24 within his allotted time?

Question 32

In Troix City, the learning rate is based on a tripling of output instead of the traditional doubling. The first unit of a long production run was produced in 20 hours. In Deux City across the river, the learning rate is based on the usual doubling of output. The first unit of the production run in Deux City took 30 hours. At what level of output will the workers in Deux City become faster than those in Troix City if both locations enjoy an 80% learning rate?

A) 27 units
B) 31 units
C) 35 units
D) 39 units

Question 33

Given that the fifth unit took 10 hours to build and the learning rate is 90 percent, how much time will it take to build units 11 through 15?

A) fewer than or equal to 38 hours
B) greater than 38 hours but fewer than or equal to 40 hours
C) greater than 40 hours but fewer than or equal to 42 hours
D) greater than 42 hours

Question 34

In Troix City, the learning rate is based on a tripling of output instead of the traditional doubling. The first unit of a long production run was produced in 25 hours. The process has an estimated learning rate of 90 percent. At what level of output will the cumulative production time exceed 200 hours?

A) 8 units
B) 9 units
C) 10 units
D) 11 units

Question 35

The mathematical model that is used to generate a learning curve is ________.

Question 36

Given that the third unit took 100 minutes and the rate of learning is 80 percent, how much time will it take to build unit 96?

A) fewer than or equal to 30 minutes
B) greater than 30 minutes but fewer than or equal to 35 minutes
C) greater than 35 minutes but fewer than or equal to 40 minutes
D) greater than 40 minutes

Question 37

What are the three major assumptions of the learning curve?

Question 38

In Troix City, the learning rate is based on a tripling of output instead of the traditional doubling. The first unit of a long production run was produced in 25 hours. The process has an estimated learning rate of 80 percent. How long will the 9th unit take to produce?

A) 22 hours
B) 20 hours
C) 18 hours
D) 16 hours

Question 39

Case I.1
The production schedule for a new product follows.

The first unit took 100 hours to complete, and the rate of learning is 80 percent. Each employee works 40 hours per month.
Using the information in Case I.1, what is the minimum number of employees needed in month 3?

A) fewer than 20 employees
B) greater than or equal to 20 employees but fewer than 30 employees
C) greater than or equal to 30 employees but fewer than 40 employees
D) greater than 40 employees

Question 40

In Troix City, the learning rate is based on a tripling of output instead of the traditional doubling. The first unit of a long production run was produced in 25 hours. The process has an estimated learning rate of 90 percent. How long will the 15th unit take to produce?

A) 18.67 hours
B) 19.28 hours
C) 20.74 hours
D) 17.23 hours

Question 41

Why is the learning rate more pronounced for complex products than for simple products?

Question 42

For a company that produces hand held calculators, the Operations Manager knows that in the early stages of production for a new product, the expenditures exceed receipts, whereas in the latter stages, the reverse is True. Give an explanation for this phenomenon.

Question 43

Which statement regarding the effect of automating some of the direct labor in a process is best?

A) The overall learning rate should be unaffected.
B) The overall learning rate will probably decrease.
C) The overall learning rate will probably increase.
D) The learning rate for the automated portion of the process should be higher than the learning rate for the portion that is not automated.

Question 44

When production time standards are being developed for a brand new process for several of the hand assembly components of the production line, what are the implications of learning effects on the time standards and the line balance? What could be done to address this situation?

Question 45

The production for a new product follows:
The first unit will take 2,000 hours to produce and the learning rate is 90 percent. Currently, the company employs 40 workers, who each work 200 hours regular time per month. In which months will overtime be needed for the production schedule shown?

A) month 4 only
B) months 3 and 4 only
C) months 1 and 2 only
D) month 1 only

Question 46

How are learning curves useful in financial planning?

Question 47

The simpler the product, the more pronounced the learning rate.

Question 48

Learning curves provide their greatest advantage in the early stages of new service or product production.

Question 49

As the cumulative number of units produced becomes large, the:

A) learning effect is more noticeable.
B) learning effect increases.
C) learning effect is less noticeable.
D) learning effect decreases.

Question 50

What are some managerial considerations when using learning curves?