Craig Brown is a buyer at Excon, a manufacturer of large industrial pumps. He has a requirement for a customized sub - assembly that his preferred supplier, Conpump, is building for the first time. He is preparing for negotiation with Conpump, where a key issue will be the price of a sub - assembly. Given the unique nature of this sub - assembly, Craig expects to incorporate, into the contract, price reduction targets based on learning curve estimates.

While Craig does not have specific data for Conpump, he has accumulated data for a sub - assembly that was similar in design and manufacturing complexity.

Units	Total Labour Hours	Average Labour	Learning Rate
		per Unit
1	6		**********
2	10.8
4	19.2
8	35.2
16	64
32	115.2
64	211.2
128	384
	Overall average improvement rate:
	Applicable learning curve:

Assignment:

Given the above data, calculate the average labour per unit given the cumulative total hours provided.

Calculate the appropriate learning rate and the overall average improvement rate for this data set.

Are gains from learning realized early in production or at a later point?

A learning curve applies to improvements in the direct labour portion of a process. How does the learning curve differ from the experience curve?