Cost Accounting: What is a Learning Curve?

What is a Learning Curve? A learning curve is a graph that shows that the more a person learns about something or experiences it, the better they’ll get at it. This applies to purchases in the economy because consumers, ideally, become smarter with their money and make more informed choices.

FinanceCost Accounting
LanguageEnglish Language

Transcript

00:19

a newfangled waffle press style of making eight horse shoes

00:23

at a time in a mold rather than stamping them

00:25

out manually with a hammer one by one The old

00:28

way had a marginal cost of sixty cents A shoe

00:30

to make the new way was more like a dime

00:33

but the learning curves were vastly different in the first

00:36

case the old school live making shoes While the process

00:39

had few moving parts there was an anvil a hammer

00:42

and a bunch of hot coals keeping the metal all

00:44

you know soft and bendy Then pounding happened and the

00:48

shoe was made so the learning curve was steep It

00:50

took a worker maybe a week to be ableto work

00:53

at I'll say ninety percent of the ultimate efficiency that

00:56

they'd eventually be at five years later when they then

00:59

be at ninety eight point two three percent efficiency stamping

01:03

out like you know ten shoes a day or something

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like that Well roll the clock forward to the waffle

01:08

Scheuer here this thing and the learning curve is massive

01:11

Not only does there need to be ah whole system

01:14

for bringing in forty times the wood as in the

01:17

one shoe shop but there's all kinds of mechanical circuitry

01:21

needed like the creation of the clay and iron mold

01:24

for the shoes themselves Then the non melting pouring mechanism

01:29

then literally gallons of molten steel and finally powder for

01:34

the mold so that the steel shoes can be removed

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easily without chisels and well pains So in the early

01:40

days of the waffle sure the company probably didn't produced

01:43

any usable shoes for a week Then it had maybe

01:46

two days a week that little the whole apparatus worked

01:49

and then produced a decent load of Ah dozen maybe

01:53

a few dozen Then after six months while the company

01:56

was its seventy percent of its safe five year maximum

01:59

a capacity as it learn See it's gradually going up

02:03

this learning curve and percent throughput per week per day

02:06

or however you want to do it all was good

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then until the Smith Thief put wet wood under the

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furnace and forgot to clean up the dry hay on

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the ground and wealth Wet wood boils the water inside

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of the fibers of the logs there which then explode

02:19

sending out sparks and bad things happen so more learning

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had to happen And then three years from inception the

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waffle Shuler was here on the learning curve cranking out

02:28

eight hundred shoes and hour and now rather than the

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old manual sure being the best in town while the 00:02:35.663 --> [endTime] horseshoe is on the other hoof