BMGT 207 Production and Operations Management: Case 1: Learning Curve Analysis

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BMGT 207 Production and Operations Management

Class Schedule:
Group No.:
Group Members:

CASE 1: LEARNING CURVE ANALYSIS

1. Baltimore Assessment Center screens and trains employees for a computer assembly
firm in Towson, Maryland. The progress of all trainees is tracked and those not showing
the proper progress are moved to less demanding programs. By the tenth repetition
trainees must be able to complete the assembly task in 1 hour or less. Torri Olson-Alves
has just spent 5 hours on the fourth unit and 4 hours completing their eight unit, while
another trainee, Julie Burgmeier, took 4 hours on the third and 3 hours on the sixth unit.
Should you encourage either or both of the trainees to continue? Why? (Show your
analysis to justify your answer). (20 points)

2. XYZ Company has been given the following production schedule for ski-lift gondola cars.
This product is considerably different from any others the company has produced.
Historically, the company’s learning rate has been 80% on large projects. The first unit
took 1,000 hours to produce.
Month Units Cumulative Units
1 3 3
2 7 10
3 10 20
4 12 32
5 4 36
6 2 38

a. Estimate how many hours would be required to produce the 38th unit. (15 points)
b. If the budget only provides for a maximum of 30 direct labor employees in any month
and a total of 15,000 direct labor hours for the entire schedule, will the budget be
adequate? Assume that each direct labor employee is productive for 150 work hours
each month. (15 points)

3. IQ Company is manufacturing a new digital scale for use by a large chemical company.
The order is for 40 units. The first scale took 600 hours of direct labor. The second unit
took 48 hours to complete: (32 pts)
Question Points

a. What is the learning rate? 2

b. What is the estimated time for 40th unit? 2

c. What is the estimated time for producing all 40 units? 2

d. What is the average time per unit for producing the last 10 units (#31
2
to #40)?

e. Compute for the labor productivity after the first 30 units are produced? 2
f. What is the labor productivity after producing all 40 units? 2

g. What is the increase/decrease in labor productivity if you compare (e)


2
and (f)?

A learning curve is geometric with the general form Y = aXb . Y = cumulative average time
per unit or batch. a = time taken to produce initial quantity. X = the cumulative units of
production or,0

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