Learning_Curve_Theory

Applying the Learning Curve Theory Student name OPS/571 January 10, 2011 Instructor name Applying the Learning Curve Learning curves occur daily in one’s business and personal life, understanding the role learning curves is essential in maximizing opportunities involving business expansion and skill-set acquisition while minimizing and containing costs during the learning curve period. The three main assumptions behind learning curves are as follows. 1. The time required to complete a given task will be less performance of the task. 2. The unit time will decrease at an accelerated initial rate, flattening as the task is mastered. 3. The reduction time will follow a predictable pattern (Chase, Jacobs & Aquilano, 2006). This purpose of this paper is to apply the learning curve theory concepts through the tests for alternatives to a process. This performance metric is then measured by data set for increase or decrease in the initial data set provided through University of Phoenix® demonstrating the learning curve theory (UOPX, 2010). Data Points for Process Performance Mario’s Pizzeria is a family-owned business in Palm Springs, California. Mario is evaluating handing over the company business to his son, Junior. The son must prove he can make sound business decisions while maintaining the original appeal of the restaurant. Junior’s areas for evaluation will include, profitability, restaurant configuration, restaurant capacity, utilization, customer wait time, queue length, lost sales, and staffing. The graph below tracks the above data points providing an accurate and quantifiable assessment of Junior’s performance to Mario’s decision. The optimal outcome is minimal wait time and queue length, high utilization percentage, minimal staffing, and increased profitability. | Base | Chg 1 | Chg 2 | Ovens down/add 1 Plax/no manual | Add MenuPt | Promo Add Take Out | Add Cream Puffs with no take-out | Config - 2-top /4-top | 0/14 | 4/12 | 8/10 | 8/10 | 8/10 | 8/10 | 12/17 | Capacity | 56 | 56 | 56 | 56 | 56 | 56 | 92 | Utilization% 2-top /4-top | 0/ 99.56 | 100/ 97.33 | 86.48/ 96.90 | 97.07/ 100 | 80/89.03 | 84.24/ 92.83 | 75.58/ 82.50 | Wait time | 11.68 | 9.2 | 5.41 | 9.67 | 3.99 | 4.68 | 3.36 | Q length | 3.07 | 2.79 | 2.58 | 2.92 | 2.40 | 2.92 | 2.68 | Balked /grp 2/4 - pty cnt | 4/36 | 23/15 | 5/14 | 21/37 | 3/11 | 8/23 | 7/21 | Staffing - WS/KS | 4/2 | 4/2 | 4/2 | 4/2 | 4/2 | 6/2 | 6/2 | Sales/day | 3,075 | 3,480 | 3,735 | 2,775 | 3,870 | 4,313 | 5,070 | Lost sales | 1,140 | 795 | 495 | 1,425 | 375 | 810 | 735 | Profitability | 1,054 | 1,334 | 1,509 | 886 | 1,653 | 1,733 | 2,061 | Add TakeOut | | | | | | $2k investment 2ppl@$70/day | $250/day rent 2ppl@$70/day | Process Alternatives Having recently earned his MBA, Junior was ready to demonstrate his knowledge to his father yet respect his father, and retain staff. Junior ran several models on paper using the skills gained in operations management. The addition of eight additional 2-tops provided the most flexible seating as staff could easily move tables together, thus maintaining the ability to accommodate parties of four. Adding four 2-tops was an option, but Junior opted for the flexibility of smaller tables offered as the latter would result in lost revenue, increased wait time, and a greater amount of balked customers. Junior further respected his father by limiting the initial changes to those familiar to Mario. As Mario gained confidence in his abilities, Junior expanded Mario’s thinking by adding cooking capacity to the kitchen staff by acquiring a Plax Oven. Through this addition, quality products and speed in order processing were retained as are reflected by the increase to the customer base. Junior also decreased the queue time by adding the MenuPoint system. The MenuPoint system increased the order processing time while increasing the effectiveness of communication between staff members and speed of service to customers. Validity of initial process data The process improvement systems are displayed in Figure 2 by the ability of the restaurant to manage the promotional events scheduled by the retail facility, Proper management of these events increase sales, while decreasing the level of balked customers. Junior’s business decisions resulted in exponential sales and profitability increases through the expansion into Cream Puffs, positioning the restaurant long-term success. During the promotional event the capacity increased 64% and profitability 19%. Lost revenue was reduced by 9%. Conclusion The learning curve theory states that repetition at specific metrics within a process will result in better results to the process over time. Junior used this theory to his advantage by changing the familiar first to his father’s confidence. Junior’s ability to make sound business decisions allowed Mario to accept the unfamiliar changes Junior introduced later in the simulation. The learning curve was Mario’s acceptance of his son’s leadership skills, which ultimately lead to increased sales and profits for Mario’s Pizzeria. References Chase, R. B., Jacobs, F. R., & Aquilano, N. J. (2006). Operations management for competitive advantage (11th ed.). New York, NY: McGraw-Hill/Irwin. MAAW. (ND). The learning curve or experience curve. Retrieved January 8, 2011 from http://maaw.info/LearningCurveSummary.htm. UOP. (2010). Pizza store layout simulation. Improving processes. Week 2. Materials. University of Phoenix website. Retrieved January 7, 2011 from https://portal.phoenix.edu/classroom/coursematerials/ops_571/20110103/.