Using Learning Curves
Learning curves can be used in a variety of ways for managerial decision making. Let us look briefly at their use in bid preparation, financial planning, and labor requirement estimation.
Bid Preparation
Estimating labor costs is an important part of preparing bids for large jobs. Knowing the learning rate, the number of units to be produced, and wage rates, the project manager can arrive at the cost of labor by using a learning curve. After calculating expected labor and materials costs, the project manager adds the desired profit to obtain the total bid amount.
Financial Planning
Learning curves can be used in financial planning to help the financial planner determine the amount of cash needed to finance operations. Learning ...
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