Learning Curve

Graphical representation of the common sense principle that more one does something the better one gets at it. Learning curve shows the rate of improvement in performing a task as a function of time, or the rate of change in average cost (in hours or dollars) as a function of cumulative output. Used in resource requirements planning, learning curves are also employed in setting incentive rate schemes based on the statistical findings that as the cumulative output is doubled, the average unit cost declines by a constant percentage. For example, an 80 percent learning curve means the per unit average cumulative cost (in hours or dollars) falls to 80 percent of the previous per unit average cumulative cost as the cumulative output doubles.

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