Introduction
The main purpose of this report is to analyze that how learning curve is a function that measures how labor cost declines as units of production increases. Labor and production are two important concepts come under the ambit of economics and finance, and it’s usually associated with the productivity of the individuals as well as the firms. Learning Curve is a curve that associated with two different variables in particular in which an increment in a single variable would lead to decrease the power of the other one and vice versa. The utilization of Learning Curve has been receiving increasing and effective attention from a decade and much of the work has been increased due to the application of learning curve other than the traditional learning based curve areas.
Carlson was the person who first introduced Learning Curve, and there are numerous authors who defined this particular concept with the name of Progress Curve and Improvement Curve (Warren & Reeve et al., 2013). The practice and utilization of Learning Curve had gained an appreciation and attention while the World War II as the government contractors searched for ways that they could use to predict cost and time requirement for the construction of the aircrafts and ships. There are a number of applications of the learning curve, and it is currently using effectively in different parts of the world merely to define different techniques in particular. The essence of Learning Curve is also applied on the concept of Labor Standards. The main perspective of this assignment is to accumulate the relative concept of the learning curve and how it influences over the productivity of the standards in particular. Let’s now move towards the Literature review section of this report.
Literature Review
Economics is a field that has its active recognition and placement in almost every walk of life and the concept of the same could be extremely important from the standpoint of the economy. There are a number of concepts that used to inform the latest concept of economics, like Economics is the name of how to earn the money and how to consume it accordingly and effectively. Adam Smith and Alfred Marshal are known as the Father of Economics who presented the most effective and organized definition of this term.
There are two different types of economic which particularly are microeconomics and macroeconomics. Microeconomics is the name of economics which associated with the economic consequences of an individual, while the branch of economics usually associated with the economics of an economy as a whole is known as macroeconomics. There are a number of concepts which come under the umbrella of macroeconomics and among them, the name of Learning Curve is one of them, which has its own recognition and importance in particular (Riahi-Belkaoui, 2001). Labor Curve, as according to the description mentioned above is a function of two different variables consists of labor cost and production in particular. Learning Curve is an important concept, and it has been the consensus that it is applied to different productivity and sections of productivity in particular. There are certain authors who identified the similarity in their conclusion as far as Learning Curve and its utilization is concerned like, Needless and Crosson and Warren Reeve (2013), who mentioned that the provision and utilization of learning curve could be extremely vital for the organizations as well as for the economies. However, there are certain authors who are in disagreement views on the issues and found that Learning Curve is not useful but an act of consuming time and cost and there would be no benefit associated with it for the companies as well as for the individuals.
It has been the consensus that there is a utilization of two different variables in particular in a given Learning Curve. In this regard, it is required to have the same on the level of Productivity and Labor Costs. According to the thesis statement of this particular analysis, it is defined that labor cost has an inverse relationship with the production, as the rise in production decreases the labor cost and vice versa. The concept is absolutely right, and it s a practical implication as well on the same. Familiarity with the necessary movements is more than important for the learning curve. There are numerous examples that could be analyzed and mentioned here which totally backed the idea of this particular theory (Needles & Powers et al., 2013). A country with low production activity would give high benefit to its employees or labors, and it diminishes as the production increases. This particular concept is similar as the Marginal Utility of Consumption (MUC), in which the consumption which has been rising with a marginal unit would decrease considerably with every increasing unit. In order to complete this particular research, there is a need of having a perfect and well organized methodological review. The aspect of methodology like data collection and sampling are some of the major aspects which are in the favor of the analysis and researcher has to become extremely keen in having this information to be included in the methodology section of the research to conduct the research in a perfect manner. There are number of studies associated with the analysis, which is known as exemplary studies in particular because there are very few people who actually worked on similar assignments. However, there are certain parts which have been relating to the previous study as previous study also worked hard for the learning curve and its applicability in particular, like it analyze the effectiveness of learning curve. The literature focuses on the benefits of learning curve and the study would enhance accordingly.
The enhancement in the production, in economic level or organizational level is effective from the standpoint of an organization as due to this particular activity, the organization would hire a higher number of labors for the production purpose which is effective for the bottom line approach of the company (Weil, 2011). When the production of the company increases, then they get a chance to manufacture more products in particular to increase the financial belongings of the company and due to the higher number of hiring of labors, the delegation of authorizes have been distributed among different individuals. Therefore, the labor cost would decrease accordingly at the same time in particular. The learning curve had demonstrated the same thing in a broader nutshell and presented that the productivity and labor cost relationship. Most of the companies used the same concept of productivity, because they know that the cost efficiency is also important from their standpoint.
In terms of conclusion, the literature says that learning curve could be extremely important and vital in particular and it should be used for different purposes.
References
Needles, B., Powers, M. & Crosson, S. (2013). Financial and Managerial Accounting. London: Cengage Learning.
Riahi-Belkaoui, A. (2001). Advanced management accounting. Westport, CT: Quorum Books.
Warren, C., Reeve, J. & Duchac, J. (2013). Managerial Accounting. 2nd ed. New York: Cengage Learning.
Weil, R. (2011). Managerial Accounting: An Introduction to Concepts, Methods and Uses. Georgia: SAGE.
