Defense Acquisition Research Journal Issue 95

January 2021

more accurate cost estimates would result if a more flexible exponent were taken into consideration in developing the learning curve model. The pro posed general modification would take the form: Cost ( x ) = Ax f(x) (1) Where: Cost(x) = cumulative average cost per unit

A = theoretical cost to produce the first unit x = cumulative number of units produced f(x) = learning curve effect as a function of units produced

The exponent function in Equation 1 will be explored in this article. Figure 1 demonstrates the phenomena this research will examine. The black (flatter) line depicts the traditional curve where learning occurs at a constant rate; the red (steeper) line represents the hypothesized learning structure where the rate of learning changes as a function of the number of units produced; and the blue line represents notional data used to fit the two curves.

FIGURE 1. LEARNING CURVE DEPICTION

52,000.00

47,000.00

42,000.00

37,000.00

32,000.00

27,000.00

22,000.00

17,000.00

12,000.00

7,000.00

2,000.00

0

1

2

3

4

5

6

7

8

Actual Data

Wright's Curve

Hypothesized Curve

75

Defense ARJ, January 2021, Vol. 28 No. 1 : 72-97