LEARNING CURVE METHODOLOGY FOR COST ANALYSTS
ARMY MATERIEL COMMAND ALEXANDRIA VA
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Cost estimates are sometimes poorly prepared because the learning curve is misunderstood or badly applied. The learning curve as a tool, regression analysis as a curve fitting technique and various devices for adjusting learning data from practical process knowledge are addressed separately in a voluminous literature. This paper puts down the main framework of necessary concepts in the application of the learning curve with appropriate references to the literature. Experience shows that, at some point in an analysis, the estimator is required to enter opinions because of lack of data, incomplete knowledge of the process or other causes beyond his control. The emphasis in this paper is to distinguish between mathematics and judgment between calculation and intuition putting cautions on the analyst to provide the reviewer with visibility as to where one ends and the other begins. Topics include a description of the forms of the learning curve with distinctions among possible variables, various necessary calculations and conversions, fundamental concepts related to the location of a straight line in two dimensional space, factors which contribute to learning in industrial processes and adjustments for special circumstances. The document was prepared as guidance to cost analysts in the US Army Material Command.
- Economics and Cost Analysis
- Operations Research