Question: One of the great examples of the learning curve phenomenon was the improvement in labor hours per car at Ford Motor Company during the early years of Model T production. During these years, assembly lines and other manufacturing systems were installed, and a variety of process and methods improvements were made in the assembly of the Model T and the fabrication of its component parts. The table below presents data on several years of production of the Model T as the improvements were being made [Data based on K. Williams et al.Ref. 9].
(a) What is the learning rate demonstrated by these data? (Hint: Tb find N for each year, use the midpoint of units produced; that is, for year 1909, which is assumed to be the first year of production, N = 14.000/2 = 7,000 and T7000 = 357 hr; for 1910, N = 14,000 + 21,000/2 = 24,500 and T24300 = 400 hr; and so on. Plot the data or use regression analysis to determine slope m.
(b) Based on your result from part (a), what is your best guess for the time to assemble the very first unit (that is, find T1)?
Year Units Produced Average Labor(hr/Unit) Selling Price ($)
1909 14,000 357 850
1910 21,000 400 950
1911 54,000 222 780
1912 83,000 250 690
1913 199,000 216 600
1914 250,000 127 550
1915 369,000 123 440
1916 585,000 134 360