The effects of work-in-process inventory considerations on learning curve construction

Learning curves have been used since the 1930' s as a tool to aid in the functions of cost estimating and production planning / control. While there has been much data collected to construct learning curves for airplanes, extensive coll ection of data to construct curves for electronic equipment has been limited. Further, virtually all published analyses to date have implicitly ignored the effects of work-in-process inventories on curve construction. This paper examines these effects through the historical construction of learning curves using actual industrial data. Work-in-process effects are considered through the use of linear and bilinear manufacturing progress functions. Degradation in the accuracy of curve construction is determined through the completion of a sensitivity analysis considering varying degrees of work-in-process activity. The results of the analysis show that work-in-process consideration affects the improvement curve percentage obtained. The method of work-in-process consideration is found to be less critical than the basic inclusion of this parameter in curve construction by one of several straightforward mathematical methods.