An 85 percent learning curve rate implies what change when production volume doubles?

An 85 percent learning curve rate implies what change when production volume doubles?

• A. Total labor hours increase by 85%
• B. Labor hours per unit decrease by 15%
• C. Material costs decrease by 85%
• D. Labor hours per unit increase by 85%

Answer: (B)

Learning curve effects describe how labor time per unit improves as cumulative output grows. An 85 percent curve means that when production volume doubles, the labor hours per unit become 85% of what they were before. In other words, there’s a 15% reduction in labor hours per unit with each doubling of output. For example, if the first unit takes 100 hours, the next unit would take about 85 hours, and the average time per unit declines accordingly as volume doubles. The other interpretations—total hours increasing, material costs changing by 85%, or hours per unit increasing—don’t align with how the learning curve operates.

Learning curve effects describe how labor time per unit improves as cumulative output grows. An 85 percent curve means that when production volume doubles, the labor hours per unit become 85% of what they were before. In other words, there’s a 15% reduction in labor hours per unit with each doubling of output. For example, if the first unit takes 100 hours, the next unit would take about 85 hours, and the average time per unit declines accordingly as volume doubles. The other interpretations—total hours increasing, material costs changing by 85%, or hours per unit increasing—don’t align with how the learning curve operates.