Theoretical foundation for a learning rate budget

Article Abstract:

A model of production learning is presented. The model resolves costs into categories based on the rate of cost reduction. The Learning Rate Budget (LRB) is a new budgeting technique that facilitates planning, bidding, forecasting, accountability, and management control by combining activities that have similar learning rates. The learning model, also known as the cost progress model, is based on postulates related to the budget, the technology, and a finite basis for the learning curve. The Power Law form of the learning curve dominates when learning must be projected or estimated for complex systems and products. The LRB model explains cost progress as the sum of a small number of fundamental cost curves having differing relative weights.

Learning, Business budgets, Learning curves, Experience curves, Teaching models

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Eliminating inventory in a series facility production system

Article Abstract:

The Japanese method of maintaining little or no inventory has become popular in the US. The just-in-time and Kanban inventory control methods are similar. A series facility production system is analyzed, demonstrating which facilities need never hold inventory. This can reduce the time and money involved in determining site location, facility design, and space utilization, which in turn simplifies production scheduling. Utilizing a zero inventory procedure, more facilities are found that do not need to hold inventories. Results indicate that some facilities need never hold inventory and that set-up costs, the main reason for large inventories, may be reduced or eliminated.

Methods, Measurement, Production standards, Inventory control, Just in time inventory systems, Just in time systems

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Variance effects in cyclic production systems

Article Abstract:

The impact of variance on a multi-item production facility was investigated by using a cyclic queuing system. A stochastic multi-item production model was developed to demonstrate the effect of the variabilities in processing rates and setup times on work-in-process inventories and production capacity. A strong and paradoxical effect was shown by the variance of setup time, service rate, and arrival rate. Variability played a key role in efficiency in that it generated paradoxes and hurt capacity.

Usage, Manufacturing processes, Manufacturing, Production management, Analysis of variance, Cycles

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