What is a Learning Curve? Meaning and Examples

Using the learning curve can provide additional insight for planning purposes. The model can be used to determine how long it takes for a single person to master a skill or how long it takes a group of people to manufacture a product. In most applications, the “learning” in the curve is actually referred to as process improvement. The learning curve model is used most commonly in organizational or industrial management to improve output by way of improving the performance of the human workforce. There are many variables in learning that impact the rate of progression and cannot be accurately reflected in the learning curve model. Using a learning curve can help a business to improve the performance and productivity of their workforce and reduce costs.

  • As output increases, it becomes harder and harder to double a company’s previous output, depicted using the slope of the curve, which means cost savings slow over time.
  • For example, consider the graph below that demonstrates the approximate average time needed to perform a given number of tasks.
  • Let‘s examine some key advantages and disadvantages of the learning curve model.
  • The learning curve theory also assumes that students motivate themselves to learn and do their best.

The learning curve theory is that tasks will require less time and resources the more they are performed because of proficiencies gained as the process is learned. The learning curve was first described by psychologist Hermann Ebbinghaus in 1885 and is used as a way to measure production efficiency and to forecast costs. These tasks are often made up of multiple complex actions or require learning many unfamiliar concepts. When the learner is first introduced to the task, they may need to learn each step and each concept before they are able to complete the task successfully. Once this initial learning period has been completed, performance will increase steadily as the learner becomes more comfortable with the task. At that point, the learner’s performance will level off, after which point they will likely see only slight increases over time.

Learning curves: What does it mean for a technology to follow Wright’s Law?

He identifies the first use of steep learning curve as 1973, and the arduous interpretation as 1978. The rate of progression increases rapidly at the beginning and then decreases over time. The formula stipulates that the more attempts that are included, the more the overall time will decrease.

The revenues of the first batch will not cover the expenses if the unit price is set in terms of cumulative average unit cost. The bottom of this curve indicates slow learning as a learner works to master the skills and takes some time to do so. The latter half demonstrates that the learner is now taking less time to complete a task and has become proficient in the skills. At this point, the learner’s performance will level off, after which only slight increases can be expected over time. The learning curve as a framework can help organizations to understand in this scenario what is required to become proficient in the software.

  • 1 The term experience curve is more of a macro concept, while the term learning curve is a micro concept.
  • It also means that the cumulative
    total hours and cost generated by the two models are not compatible when based
    on the same learning rate.
  • Activities that follow a diminishing returns learning curve are more straightforward when measuring and predicting how the performance and output of the workforce will change over time.
  • When I teach, I try to avoid grading every little thing my students do, because I’m aware that they really are not all on the same learning curve.
  • This could be described as a plateau, where the individual is no longer progressing.

It can be a useful tool for businesses to enhance productivity and profitability. 1 The term experience curve is more of a macro concept, while the term learning curve is a micro concept. The
term experience curve relates to the total production, or the total output of
any function such as manufacturing, marketing, or distribution. The development
of experience curves is attributed to the work of Bruce Henderson of the Boston
Consulting Group around 1960.

What Does a High Learning Curve Mean?

In this model of a learning curve, it states that the rate of progression is a bit slow at the onset but gradually picks up momentum and starts to rise until the time it reaches full proficiency. An 80 percent learning curve means that the cumulative average
time (and cost) will decrease by 20 percent each time output doubles. In other
words, the new cumulative average for the doubled quantity will be 80% of the
previous cumulative average before output is doubled.

Stages of using learning curve

The latter half of the curve indicates that the learner now takes less time to complete the task as they have become proficient in the skills required. Often the end of the curve begins to level off, indicating a plateau or new challenges. The bottom of the curve indicates slow learning as the learner works to master the skills required and takes more time to do so. This is the basis for the learning curve formula, the “Cumulative Average Model” (or “Wright’s Model”), which was described by T.P. Wright in 1936 in his work “Factors Affecting the Cost of Airplanes“, after realizing that the cost of aircraft production decreased with the increase in production performance. There are currently different variations of the original formula used today in specialized applications, but the idea remains familiar to the original formula.

Understanding the 70% Learning Curve

Historically, it has been reported that whenever there has been instanced of double production, the required labor time has decreased by 10 or 15 percent or more. The theory of the learning curve or experience1 curve is based
on the simple idea that the time required to perform a task decreases as a
worker gains experience. The basic concept is that the time, or cost, of
performing a task (e.g., producing a unit of output) decreases at a constant
rate as cumulative output doubles. Learning curves are useful for preparing cost
estimates, bidding on special orders, setting labor standards, scheduling labor
requirements, evaluating labor performance, and setting incentive wage rates. When new employees are trained, there’s often a steep learning curve at the beginning.

Improved quality

Efficiency and development curves typically follow a two-phase process of first bigger steps corresponding to finding things easier, followed by smaller steps of finding things more difficult. It reflects bursts of learning following breakthroughs that make learning easier followed by meeting constraints unearned revenue definition that make learning ever harder, perhaps toward a point of cessation. The rate of progression is slow at the beginning and then rises over time until full proficiency is obtained. They can be represented in a chart, with linear coordinates, like the charts above in which the shape is an actual curve.

While delving too much into Learning Curve Theory might feel a bit esoteric for most business owners, it can help you figure out how fast a skill or knowledge can be learned. This is useful for anyone using digital learning platforms, as it lets you measure and predict how well a training program will work. With this information, you can make better choices for your business, whether it’s training your staff or educating your customers.

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