Application of Learning Curve: An Analysis
8 Pages Posted: 6 Jun 2011
Date Written: May 30, 2011
The main intention of this paper is to check the application of learning curve phenomenon with the managerial point of view. Repetition of the task is likely to make people more confident and knowledgeable and will eventually result in a more efficient and rapid operation. So to check this concept, actual data on average cost and output of Sial clothing mills in Shuja Abad, Multan has been collected for the time period from January 2007 to December 2009. By using E-views, we have estimated a learning curve equation by regressing average cost against output. The result of our study shows that as the level of output of the company is increased its average cost is decreased, it means firm is gaining experience from past mistakes and successful in decreasing average cost with the level of output. So if managers focus on this aspect then it will help them to reduce the average cost.
Keywords: Learning curve, Sial clothing mills, average cost, total output
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