Subscribe:

Ads 468x60px

Limitations of learning curve theory

Following limitations of learning curve must be kept in view :
1. All activities of a firm are not subject to learning effect. Following types of activities are subject to learning effect :

(a) Those, that have not been performed in this present operational mode.
(b) Those which are being performed by new workmen, new employees or others not familiar with the particular activity. In contrast, activities being performed by experienced workmen, who are thoroughly familiar with those activities will not be subject to learning effect.

(c) Those involving utilization of material not used by firm so far.
2. It is correct that learning effect does take place and average time taken is likely to reduce. But in practice it is highly unlikely that there will be a regular consistent rate of decrease, as exemplified earlier. Therefore any cost predictions based on covernational learning curves should be viewed with caution.

3. Considerable difficulty arises in obtaining valid data, that will form basis for computation of learning effect.

4. Even slight change in circumstances quickly renders the learning curve obsolete. While the regularity of conventional learning curves can be questioned, it would be wrong to ignore learning effect altogether in predicting future costs for decision purposes.
Related Posts Plugin for WordPress, Blogger...