Stephen R. Lawrence Associate Professor of Operations Leeds School of Business University of Colorado Boulder, CO 80309-0419

Slides:

Advertisements

Similar presentations

Learning Curve. Performance improvement As an organization gains experience in manufacturing a product, the labor inputs required per unit of output diminish.

Advertisements

Quantitative Demand Analysis Pertemuan 5 - 6

Learning Curve.

Imperfect Competition Pure Monopoly. Price (Average Revenue) Quantity Demanded (Q) Total Revenue (R) Change in Total Revenue (ΔR) Marginal Revenue (ΔR.

Global Entrepreneurship Culture & Economies ESSAM 2011 Professor Stephen Lawrence Leeds School of Business University of Colorado at Boulder.

Competing with Flexibility Leeds School of Business University of Colorado Boulder, CO Professor Stephen Lawrence.

Professor Stephen Lawrence Defining Operations Leeds School of Business University of Colorado Boulder, CO

Global Entrepreneurship Culture & Economies ESSAM 2010 Professor Stephen Lawrence Leeds School of Business University of Colorado at Boulder.

Service as a Revenue Source %< 5%5-10%15-20%25-30%40%100% Count Percentage of revenue derived from services: %18-30%25%65%100% Count1111 Percent.

Competing with Flexibility Leeds School of Business University of Colorado Boulder, CO Professor Stephen Lawrence.

Operating Exposure International Corporate Finance P.V. Viswanath.

Formulate an Offer Stephen Lawrence and Frank Moyes Graduate School of Business University of Colorado Boulder, CO

Learning Curve Analysis

1 The average time per task declines by a constant percentage each time the quantity of tasks done doubles. There is often a systematic relationship between.

Strategic Management of Technological Innovation – Melissa Schilling

Operations Planning Lecture #7. Forecasting Estimating future events Has NO value to an organization unless the forecasts are included in organization’s.

Managerial Economics & Business Strategy Chapter 3 Quantitative Demand Analysis.

Nations Have Different Economic Outcomes

Michael R. Baye, Managerial Economics and Business Strategy, 3e. ©The McGraw-Hill Companies, Inc., 1999 Managerial Economics & Business Strategy Chapter.

3 CHAPTER Cost Behavior 3-1.

Monopoly. Monopoly Monopoly is when the market is dominated by a single seller Monopoly is when the market is dominated by a single seller –They can take.

Cost in the Long Run How does the isocost line relate to the firm’s production process? 56.

State University of New York WARNING All rights reserved. No part of the course materials used in the instruction of this course may be reproduced in any.

Productivity and Learning Curves

Chapter 6 Scale Economies, Imperfect Competition, and Trade.

ISAT 211 Mod 2-1  1997 M. Zarrugh ISAT 211 Module 2: Competitiveness and Operations Strategy  The learning objectives of this module are –To explain.

A percentage change is a way to express a change between the old value and the new one (which is the extent to which something gains or loses value.)

BUSINESS MANAGEMENT PAVONE 1-2 CHANGES AFFECTING BUSINESS.

Chapter 8 Economic Growth Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent.

The Economics of Production Make or Buy Decisions Capacity Expansion Learning-Curves Break-even Analysis Production Functions.

Cost based pricing MM – Block III Unit IV – Pricing Prepared By – Pinal Shah.

Entrepreneurship in a Market Economy. Needs and Wants  Needs: things you must have  Wants: things you think you must have.

Economics.  Characteristics  Profit motive  Open opportunity  Legal equality  Private Property rights  Free Contract  Voluntary Exchange  Competition.

What is Going on in Some of the Traditional Dairy States? By Bob Cropp Dairy Marketing an Policy Specialist University of Wisconsin-Madison.

Learning Curves McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Ch 61 IT-390Preliminary and Detail Methods. 2 Design and Evaluation ä Preliminary Estimate requested during the initial evaluation for several reasons:

© 2008 Prentice Hall, Inc.E – 1 Operations Management Module E – Learning Curves PowerPoint presentation to accompany Heizer/Render Principles of Operations.

Learning Curves Chapter 4A. Objectives 1. Understand what learning curves are and how they can be estimated. 2. Apply learning curves to estimate the.

Slide 1 Mass Customization and the Learning Curve Appendix 9A Mass customization is the new trend of making products partially mass produced, and partially.

Professor Jeff Dyer Strategic Management Cost Advantage.

Operations Management

E - 1© 2011 Pearson Education, Inc. publishing as Prentice Hall E E Learning Curves PowerPoint presentation to accompany Heizer and Render Operations Management,

Deterministic Inventory Theory Professor Stephen R. Lawrence Leeds School of Business University of Colorado at Boulder Boulder, CO

Industry Analysis Entrepreneurship Business Plan.

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc.,

N A S A G O D D A R D S P A C E F L I G H T C E N T E R I n t e g r a t e d D e s i g n C a p a b i l i t y / I n s t r u m e n t S y n t h e s i s & A.

Target Costing and Cost Analysis for Pricing Decisions CHAPTER 15 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution.

ME - 1© 2014 Pearson Education, Inc. Learning Curves PowerPoint presentation to accompany Heizer and Render Operations Management, Eleventh Edition Principles.

McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All Rights Reserved. Supplement 7 Learning Curves.

SUPPLY CHAPTER 5. LAW OF SUPPLY SUPPLY: AMOUNT OF GOODS AVAILABLE SUPPLY: AMOUNT OF GOODS AVAILABLE PRICE INCREASES: SUPPLY INCREASES PRICE INCREASES:

Linear Programming Technical Supplement 3 Learning Curves Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.

Business Strategy: Differentiation, Cost Leadership, and Integration Joe Mahoney.

IENG 217 Cost Estimating for Engineers Product Estimating.

Learning Curve Analysis Supplement I Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall I - 01.

Learning Curves McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Learning Curves Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill.

Dr. Galbraith, Mgt 455.  Labor inputs  Mass production of similar items or services  Long production cycles  Few radical product innovations 

Unit 1 Basic Economic Concepts 3/8/2016. Scarcity & Opportunity Costs People have unlimited wants Resources to fulfill these wants are limited. Resources.

Analytical Tools Marginal analysis Discounted cash flow.

Chapter 5 - Supply Supply – the amount of a product that would be offered for sale at all possible prices in the market. Law of Supply – suppliers will.

Types of Economic Competition

Costs in the Short Run Three Costs Marginal Cost Average Total Cost

Learning Curves Guanyi Lu November 27, 2018.

Resistance of water through a pipe

Labor Supply and Demand

Chapter 6 The Cost of Production Chapter 6 1.

Service as a Revenue Source

Chapter 6 Alternative Theories of Trade

Process Class Org. Property Class Computation Class Well Log

E Learning Curves PowerPoint presentation to accompany

Presentation transcript:

Stephen R. Lawrence Associate Professor of Operations Leeds School of Business University of Colorado Boulder, CO Leeds.colorado.edu/faculty/lawrence Learning Curves

As experience increases, costs decline. For each doubling of cumulative unit production, costs decrease by some percentage  Learning on the part of labor (methods improvement)  Changes in production methods and tools  Improved product design  Changes in layout and process flow  Standardization

Learning Curve Model k n = k 1 n b n = cumulative unit output k n = cost of the n th item k 1 = cost of the first item r = rate of learning b = learning parameter b = log r / log 2

Example: Learning Curves k 1 = $100 per unit (both firms) r = 0.8 (80 percent learning curve) n A = 1000 (after two years) n B = 500 (after two years) Consider two start-up firms making similar new products. If firm A produces at twice the rate of firm B, what will be the relative costs of the two firms after 2 years? First – find b: r = 0.8 b = log r / log 2 = log 0.8 / log 2 = / =

Example: Learning Curves k 1 = $100 per unit (both firms) b = (80 percent learning curve) n A = 1000 (after two years) n B = 500 (after two years) Consider two start-up firms making similar new products. If firm A produces at twice the rate of firm B, what will be the relative costs of the two firms after 2 years? k 1000 = k 1 n A b = 100 (1000) = $10.82 / unit Firm 1 will have a 25% cost advantage over Firm 2 ! k 500 = k 1 n B b = 100 (500) = $13.53 / unit

Competing with Learning Cost per Unit Number of Units Produced Slower Learning Faster Learning Faster learning means lower costs and competitive advantage

Competing with Learning Cost per Unit Number of Units Produced Faster learning can offset initial cost disadvantages

Competing with Learning Cost per Unit Number of Units Produced Faster learning can offset a late market start

Learning Curves: Another Example Your snow board manufacturing company is taking off and has received an order for 80 boards of a new design. The first board took 46 hours to produce (!), but you are learning quickly, and the 10 th board took only 24 hours to produce. What is your rate of learning? How many hours do you estimate the 80 th board will take to manufacture?

Learning Curve Spreadsheet