We have written this appendix to provide managers and their teams with brief guidelines for creating experience curves. We have also summarized our perspectives on a few special situations that often need to be considered.
GUIDELINES FOR CREATING AN EXPERIENCE CURVE
The experience curve, as described in chapter 2, shows how unit prices and costs generally decline as experience accumulates. The first step in creating such a curve is gathering the necessary data and determining the right “unit of experience.” Often the unit of experience is straightforward—square feet of carpet for a carpet manufacturer, for example. But if costs and prices seem to be rising over time, it may be because you are neglecting what customers ...
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