Learning Curve: An Important Modern Concept in Economics
文章推薦指數： 80 %
The learning curve is an important modern concept according to which cumulative experience in the production of a product over time increases efficiency in ... YourArticleLibrary Home StaticMainMenuHome ShareYourFiles Disclaimer PrivacyPolicy ContactUs ProhibitedContent ProhibitedContent ImageGuidelines PlagiarismPrevention ContentFiltrations TermsofService AccountDisabled ReturntoContent Articlesharedby: ADVERTISEMENTS: Thelearningcurveisanimportantmodernconceptaccordingtowhichcumulativeexperienceintheproductionofaproductovertimeincreasesefficiencyintheuseofinputssuchaslabourandrawmaterialsandtherebylowerscostperunitofoutput.K.J.Arrow,oneofthepioneersinputtingforwardthisconceptcallsit“Learningbydoing”. AccordingtoArrow,asafirmoritsmanagerproducessuccessivelotsofoutputovervariousperiodsoftime,itlearnstoproducemorewithagivenquantityofresourcesoritiscapableofproducingagivenoutputbyusinglesserquantitiesofinputsorresourcesthanbefore. Thus,eitherwiththeincreaseinefficiencyofresourcesorwithsavinginresourcessuchaslabourandrawmaterials,costperunitofoutputdeclines.Thislearningcurveeffectmostlyoccursinthereductionoflabourrequirementsperunitofoutput. ADVERTISEMENTS: Anumberoffactorsbringthislearningcurveeffect.Ascumulativevolumeofoutputoversuccessiveperiodsoftimeincreases,labourandsupervisorsbecomemorefamiliarwiththeworkmethodsortheproductionprocess,whichleadstothereductionintheamountofscrapandothertypesofwastes. Besides,rawmaterialscostperunitofoutputmayalsodeclineascumulativevolumeofoutputinsuccessiveperiodsovertimeincreasesandasaresultafirmgainsmoreexperienceindoingaproductionprocessrepeatedlyoversuccessivetimeperiods. ThelearningcurveisgraphicallyshowninFig.19.16whereontheX-axiscumulativetotaloutputoversuccessiveperiodsoftimeandontheF-axiscostperunitofoutputaremeasured.ItwillbeseenfromFig.19.16thatthelearningcurveshowsdownwardwhichshowsdecliningcostperunitofoutputascumulativeoutputincreasesovertimeandthefirmlearnsfromitsworkexperience. Thelearningcurveeffectisusuallyexpressedasaconstantpercentage.Thispercentagerepresentstheproportionbywhichcostperunitofoutputdeclineswiththeincreaseincumulativeoutputineachsuccessivetimeperiod. ADVERTISEMENTS: Forexample,ifinaproductionprocesslabour-inputcostexperiences80percentlearningcurveeffect,thismeansthatifinthefirstperiodproductionofaunitofoutputrequireslabourcostofRs.1000,inthenextperiodlabourcostperunitwilldeclinetoRs.800andsoforth. Thislearning-curverelationshipbetweencostoutputsisexpressedalgebraicallyasfollows: C=aAb ADVERTISEMENTS: WhereCistheinputcostofQthunitofoutput,Qissuccessiveunitofoutputproduced,aistheinputcostperunitofoutputinthefirstperiodandbistherateofdeclineincostperunitofoutputinthesuccessiveperiod.Sincethelearningcurveisdownwardsloping,thevalueofbisnegative. Itisimportanttonotethatreductionincostperunitduetothelearningcurveeffectisdifferentfromeconomiesofscale.Whereaseconomiesofscalerefertothedeclineincostperunitofoutputasafirm’soutputpertimeperiodincreases,thelearningcurvedescribesthereductionincostperunitofoutputasafirm’scumulativeoutputoversuccessivetimeperiodsincreases,whileoutputperperiodmayremainthesame. RelatedArticles: MarginalCost L-ShapedLongRunAverageCostCurve:ModernCostTheory Cur L-ShapedLongRunAverageCostCurve:ModernCostTheory TypesofExternalEconomiesandCostCurveinEconomics Nocommentsyet. LeaveaReplyClickheretocancelreply.Youmustbeloggedintopostacomment. Beforepublishingyourarticlesonthissite,pleasereadthefollowingpages:1.ContentGuidelines2.ProhibitedContent3.PlagiarismPrevention4.ImageGuidelines5.ContentFiltrations6.TOS7.PrivacyPolicy8.Disclaimer9.Copyright10.ReportaViolationAdvertisements Latest WorkingCapitalManagement April27,2022 WhatisFinance? April25,2022 WhatisInventoryManagement? January20,2022 ConsumerDecisionMaking January6,2021 DiffusionofInnovation November9,2020
延伸文章資訊
- 1Economies of Scale/Scope, Learning Curve | CourseNotes
Economies of Scale/Scope, Learning Curve · input proportions change >> expansion path no longer a...
- 2Learning curve - Oxford Reference
- 3Learning Curve in Economics - MBA Knowledge Base
Economies of Scale are shown in terms of Cost-output relation measured along the same Long Run Av...
- 4The Learning Curve Theory: Types, Benefits, Limitations (2022) | Whatfix
- 5Economies of Scale Versus the Learning Curve - LinkedIn
As Besank et al note, there is a difference between economies of scale and the learning curve (81...
