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GAO-20-195G Appendix VII: unit learning curve at 80 % and cumulative-average curve at 90 %
| Tool | Cost Estimating |
| Source | U.S. Government Accountability Office (2020). Cost Estimating and Assessment Guide: Best Practices for Developing and Managing Program Costs. GAO-20-195G. Appendix VII, Learning Curve Analysis, pp. 378–379. |
| Level | Undergraduate |
Problem
The first unit of a product costs $1,000 and the unit learning-curve slope is 80 %. What do the second, third and fourth units cost? In a second example the average cost of the first 10 units is $100 on a 90 % cumulative-average curve: what are the averages of the first 20 and the first 40 units?
Inputs to Enter
- Learning curve, slope entered: slope 80 %, first-unit cost 1,000, units N 4 (unit theory)
- Second example: slope 90 %, first-unit cost chosen so that the average of the first 10 units is 100, N 40 (cumulative-average theory)
Answers
- b = ln 0.8/ln 2 = −0.322; unit 2 = $800, unit 3 = $702, unit 4 = $640
- 90 % cumulative-average curve: average of the first 20 units $90, of the first 40 units $81
- Crawford unit 8 at 90 % = 0.729 T1; Wright average of 2 units at 80 % = 0.8 T1 (unit 2 = 0.6 T1)
Notes
Change the default slope 90 % to 80 % and N to 4 for the first example; the tool prints both the Crawford (unit) and the Wright (cumulative-average) curves for every case.