Predicting new product labour hours

Bounded learning-by-doing and sources of firm level productivity growth in colombian food manufacturing industry

“…The conventional learning model assumes that the productivity increases with firm's cumulative output and persists indefinitely with production experience (Arrow, 1962;Rapping, 1965;Lieberman, 1984;Bahk & Gort, 1993;Irwin & Klenow, 1994;Jarmin, 1994;Benkard, 2000;Thompson, 2001). Following the arguments similar to Cochran (1960) and Cochran and Sherman (1982), we extend the conventional learning model by modeling learning progress as a logistic function which explains three stages (slow start-up, acceleration, and plateau) of learning progress concept. It is important to note that with a given technology firms gain expertise that allows them to operate the technology more efficiently.…”

“…The proposition is that during the early stage a firm attempts various options, and explores alternative production plans and designs which slow down the initial learning rate. After the initial exploration there are fewer changes in the production system leading to a higher learning rate (Cochran & Sherman, 1982). Both the learning bound and its S-shape character are important in the sense that the learning limit captures the diminishing return of learning a given technology and the S-shape replicates the start-up phase of a firm.…”

The cost of production breaks

“…Some of the most detailed work in the analysis of the cost of disruptions has been done by Cochran [5] and Cochran and Sherman [6]. In [6] Cochran and Sherman give descriptions of possible effects of disruption.…”

“…In light of the previous paragraph, it would seem that other factors, in particular those detailed by Cochran and Sherman [6] are also (perhaps more so) to blame for increases in cost.…”

“…Adjusting i for units 10 through 20 to take this into account (i.e., for unit 10 the learning component in (2) Figure 2. Other cost impacts mentioned by Cochran and Sherman [6] would make the break even more pronounced.…”