Accession Number:

ADA058648

Title:

The Tradeoff Between Learning and Inflation in Shipbuilding,

Descriptive Note:

Corporate Author:

ASSOCIATION OF SCIENTISTS AND ENGINEERS OF THE NAVAL AIR AND SEA SYSTEMS COMMAND WASHINGTON DC

Personal Author(s):

Report Date:

1978-03-01

Pagination or Media Count:

39.0

Abstract:

Learning leads to a decrease in program cost. Inflation leads to an increase in program cost. At a certain time, the benefits of learning and the penalty due to inflation will balance each other. This time is defined as the critical time. The critical time depends upon the number of ships to be built because this determines the possible gain in learning. The critical time depends also on the assumed inflation, upon the achievable learning rate and on the materiallabor ratio of the first ship. Learning expectation can be influenced by planning and the materiallabor ratio by a make- or buy-decision. Assumptions on future learning are as vague as assumptions on inflation. The paper shows that it is almost impossible to beat inflation. It shows that accelerated programs are preferable and that make-decisions supersede the value of buy decisions. The result is derived from an abstract treatment of the subject. Author

Subject Categories:

  • Marine Engineering

Distribution Statement:

APPROVED FOR PUBLIC RELEASE