Assess the Occurrence and Effects of Learning Curves

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//In the contemporary business environment, learning curves are being used, as a tool by the organizations and employees, to deliver the projects in a better way. Learning Curves have significant implications in project activities. In this context, in the following discussion, we have explored a brief overview of learning curve and its diverse implications in the project environment.//
A learning curve is basically a graphical representation of the increase in learning, which is attained through experience. Learning curves are useful to the organizations as it enables the organizations to predict the time that would be undertaken for the future tasks. The learning curve is useful for the purpose of management accounting as it facilitates the managers to take into consideration, the impact of learning for the purpose of planning, budgeting, controlling and to make critical decisions (Steven, 2010).
The following diagram of the learning curve illustrates the relationship between labor-hours per unit with respect to the number of units produced.
(See figure at page 1)
Source: http://wps.prenhall.com/wps/media/objects/2234/2288589/ModE.pdf
The above figure demonstrates the learning curve, which indicates that the time per repetition decreases as the number of repetition increases.
The learning curves are useful not only for estimating the costs, but it also acts as a tool for forecasting in the project. Learning curve is a geometrical progression, which enables us to know that the cost for the accomplishment of a repetitive work decreases steadily, when the identical work is repeated more (Agbodu, et al., 2012). The effect of the learning curve is that the production of each subsequent unit takes into account few man and hours. The experience, which is gained through the learning curve, is reflected by the way of the decrease in man and hours or the cost.
The learning curve theory was developed and introduced by T.P. Wright. He developed this theory while he was engaged in the production of the airframes. Moreover, the theory of the learning curve states that the cost of the item decreases at a fixed rate when the quantity produced of that item is doubled (Agbodu et al., 2012). This is the main benefit of the learning curve theory, which enables the organizations to develop better methods of tooling and use them. Additionally, it enhances the organizations in designing more ...