Chapter Outline

Work Measurement
Solved Problems
OM Spotlight: Work
Key Terms and Concepts
Measurement Activities in
Roller Coaster Maintenance Questions for Review and
Discussion
Time Study Methods
Problems and Activities
OM Spotlight: Job Description—
City of Phoenix, Arizona Cases
Operations Analyst for City of Rehabilitation Hospital of
Phoenix, Arizona Florida
Predetermined Time Standard The State versus John Bracket
Methods Endnotes
Learning Curves
Practical Issues in Using Learning
Curves

SUPPLEMENTARY
CHAPTER A Work Measurement,
Learning Curves, and
Standards
Learning Objectives
• To understand the purpose of work measurement and methods
that organizations use to perform time studies, calculate standard
times, and estimate the proportion of time spent performing differ-
ent types of tasks.
• To understand the concept of learning curves and how they can
affect business decisions, and to learn computational methods for
estimating aggregate production times in learning environments.
A2

• “John Bracket has filed a lawsuit against us, George,” stated Paul Cumin, the
vice president of operations for the State Rehabilitation Services Commission
(SRSC). “George, you are Bracket’s manager. So what happened? He claims
you raised his daily productivity quota for processing invoices from 200 to 300.”
“Paul, I did raise his quota to more closely match the other employees. Bracket
is always late for work, plays games on the computer, violates our dress code,
and is generally disliked by his peer employees,” responded George Davis,
Bracket’s immediate supervisor. “Is there any logic or numerical basis for your
increasing his quota?” Paul asked him. As he left the room, George responded,
“Paul, I’ll get my work study data out, review it, and get back to you this
afternoon.”

• “Jim, it takes 2,000 hours to build each electrical generating turbine, so if we

have to build ten, it takes 20,000 hours. We should plan our budget and price per
generator based on 20,000 hours,” exclaimed Pete Jacobs, the vice president
of finance. “No, Pete. According to my calculations, it will take only 14,232
hours to build ten turbines and our total cost and budget will be much lower
than you think,” said Jim Conner, the vice president of operations. “How do
you get such crazy numbers?” replied Jacobs.

Time standards represent reasonable estimates of the amount of time needed to per-
form a task based on an analysis of the work by a trained industrial engineer or
other operations expert. The first episode highlights the importance of time stan-
dards in setting job performance standards, and how they can affect management-
labor relations. Bracket’s new processing quota of 300 invoices per day may or may
not be a fair job performance goal, but the only way to find out is through care-
ful work measurement analysis. You will have the opportunity to analyze this sit-
uation in more detail in one of the cases at the end of this chapter.
In the second episode, Jacobs cannot understand the discrepancy between his
estimate of 20,000 hours and Conner’s value of 14,232 hours to produce a batch
of turbines. The assembly of electrical power-generating turbines is a complex job
with labor costs for engineers and production employees approaching $100 per
hour. Obviously, a difference of 5,768 hours can be significant in terms of cost,
budgets, and pricing decisions. Where did Conner get his figure? Moreover, why
should the total time to produce ten turbines be less than 10 times the time to pro-
duce the first? Many work tasks show increased performance over time because of
learning and improvement. Failure to recognize this can lead to poor budgeting,
erroneous promises for delivery, and other bad management decisions.
In this supplemental chapter we introduce work measurement, standards, and
learning curves, and how they are used in business. Most large corporations de-
velop standard times for routine work tasks using work measurement. They are
used in setting job performance standards, establishing recognition and reward pro-
grams, and for compensation incentives. Valid standard times are vital to accom-
plishing most of the process design and operations analysis methods described in
this text. Smaller businesses, especially service businesses, usually do not have such
standard times for their work activities and tasks. However, if one seeks to improve
operations, analyzing work and determining standard times for key work activities
and processes is a crucial first step.
Supplementary Chapter A: Work Measurement, Learning Curves, and Standards A3

WORK MEASUREMENT Learning Objective

To understand the purpose of
work measurement and methods
Operations managers are interested in how long it takes to create an output or out-
that organizations use to perform
come, or equivalently, how much can be produced over a certain length of time. time studies, calculate standard
Work measurement is a systematic procedure for the analysis of work and determi- times, and estimate the
nation of times required to perform key tasks in processes. Work measurement leads proportion of time spent
to the development of labor and equipment time standards that are used for performing different types of
tasks.
• estimating work-force and equipment capacity,
• establishing budgets, Work measurement is a
• determining what new work procedures will cost, systematic procedure for the
• evaluating time and cost trade-offs among process design alternatives, analysis of work and
• establishing wage-incentive systems, determination of times
• monitoring and evaluating employee performance and productivity, and required to perform key tasks
• providing accurate information for scheduling and sequencing. in processes.

Without accurate time standards it is impossible to perform these tasks. For ex-
ample, the process of assembly-line balancing, discussed in Chapter 7, requires ac-
curate estimates of the standard time required to perform each task or work activity.
Standard times are management’s anchor in an uncertain operating environ-
ment. To establish usable standards, work tasks and activities must be carefully
defined and studied. Thus, job and process analysis should precede work measure-
ment. How long it takes to perform a task depends on the worker’s pace, operat-
ing conditions, and work method. Normal time is the expected time required to Normal time is the expected
perform some work activity at a normal pace, under normal operating conditions, time required to perform
and using a prescribed method. By a normal pace, we mean a pace that can be con- some work activity at a
sistently performed by the average employee without undue fatigue under normal normal pace, under normal
operating conditions. The prescribed method to perform a task is usually developed operating conditions, and
using a prescribed method.
by industrial engineers who identify the most efficient and safest procedure.
However, not everyone works at the same pace, and people may either slow
down or speed up their effort when they are being observed. Thus, observed times
must be adjusted by a factor that accounts for the worker’s effort. Normal times
are calculated using the following equation:

Normal time
Observed time  Performance rating factor
OT  PRF (A.1)

The performance rating factor (PRF) is a judgment made by the person doing the
time study as to whether the employee is working at the normal pace (that is, 1.0
or 100 percent), below the normal pace (that is, less than 1.0 or 100 percent), or
above the normal pace (that is, greater than 1.0 or 100 percent). For example, a
PRF of 115 percent indicates that work is being performed at a pace that is 15 per-
cent above normal. Typically, three or more highly trained work study analysts
make these judgments independently and then the average PRF is used in Equation
(A.1). For example, if work study analyst A rates an employee at PRF
1.2 and
an observed time of 2.5 minutes per unit, B rates the same employee at PRF
1.0
and an observed time of 2.2 minutes per unit, and C rates the same employee at
PRF
0.9 and an observed time of 2.1 minutes per unit, then, using Equation A.1,
the normal time is 2.363 minutes per unit (1.2  2.5  1.0  2.2  0.9  2.1)/3. Allowances include time for
Normal times must also be adjusted for personal time and unavoidable delays. labor fatigue and personal
Allowances include time for labor fatigue and personal needs, equipment break- needs, equipment breakdowns,
downs, rest periods, information delays, and so on. Most allowance factors are in rest periods, information
the range of 10 to 20 percent. Standard time is normal time adjusted for allowances. delays, and so on.
It is computed using the following equation:
Standard time is normal time
Standard time
Normal time (1  Allowance factor) (A.2) adjusted for allowances.
A4 Supplementary Chapter A: Work Measurement, Learning Curves, and Standards

OM SPOTLIGHT
Work Measurement Activities in Roller Coaster
Maintenance1
A popular roller coaster called the
Runaway Mine Train (RMT) requires
extensive inspections, maintenance,
and repair to keep it running and earning revenue. During
peak season, the RMT is expected to operate 16 hours per
day. Each part of the RMT, from structural steel uprights to
the bearings in the wheels, must be inspected and well main-
tained. All RMT daily work tasks are grouped into work ac-
tivities such as complete train inspection, track inspection,
electrical inspection, cleaning the trains, and vehicle inspec-
tion. Each work activity is assigned a craft employee such
as a track and vehicle machinist, electrician, sound engineer,
custodian, oiler, software and computer operator, and so on.
Sixty-one distinct jobs existed for this attraction but only the
jobs related to inspection, maintenance, and repair were to
be time studied.
A sampling plan was established and the data collected.
Once time standards were determined for all maintenance-
related tasks, the number of employees required was com-
puted. Preventive maintenance was done each Wednesday
and required additional changeover or setup time. Two teams
were established, each with four people. One team worked
Sunday to Wednesday and the second team from Wednes-
day to Saturday. The two teams overlapped on Wednesday
for one-half day to get all preventive maintenance done. Work
measurement information and analysis plays a major role in
achieving the objectives of operating safety, efficiency, and
profitability.

For example, if the normal time is 2.363 and an allowance factor of 1.2 is used,
the standard time is 2.836 minutes per unit.
The performance rating factor and allowance factor are based on human judg-
ments, and therefore, the procedure for establishing standard times must include
audits, third-party reviews, and extensive training and retraining of work-study an-
alysts to keep them properly calibrated. Videotapes of employee work activities are
often used to train work-study analysts (also see OM Spotlight: Work Measure-
ment Activities in Roller Coaster Maintenance).

Time Study Methods

Time study is the
development of a standard
time by observing a task and
analyzing it with the use of a
stopwatch.
Time study is the development of a standard time by observing a task and analyz-
ing it with the use of a stopwatch (see OM Spotlight: Job Description—City of
Phoenix, Arizona). The general approach to time study can be described as follows.
1. Define and evaluate each task and activity. This includes determining what level
of detail is best for time study measurements, and then grouping or separating
tasks accordingly.
2. Measure and record the time needed to perform each task or activity over a
number of cycles. A trained observer with a stopwatch usually does this. A num-
ber of observations should be taken to account for variability in performance.
Assuming that the distribution of task times is normally distributed for each
task, the number of cycles that should be observed is determined statistically by
the sample size (n) formula, Equation (A.3):
n  (z /2)2 2/E2 (A.3)
where z/2 is the value of the standard normal distribution having an area of
/2 in the upper tail,  is an estimate of the standard deviation, and E is the
desired sampling error. When timing a work activity with multiple tasks, the
Supplementary Chapter A: Work Measurement, Learning Curves, and Standards A5

general rule is to take the largest sample size estimate from Equation (A.3) for
all tasks.
3. Rate the employee’s performance of each task or activity. As noted, rating hu-
man performance accurately requires considerable training.
4. Use the performance rating and Equation (A.1) to determine the normal task time.
The sum of those task times is the normal time for the entire work activity.
5. Determine the allowance factor for the work activity.
6. Determine the standard time using Equation (A.2).
To illustrate time studies, we will consider a simple manual assembly process. An operations activity chart
Exhibits A.1 and A.2 show a faucet assembly and an operations activity chart, is a detailed analysis of work
which provide the basis for developing the time study. An operations activity chart is motions performed for a
a detailed analysis of work motions performed for a manual task. manual task.

OM SPOTLIGHT
Job Description—City of Phoenix, Arizona2
The city of Phoenix, Arizona posted
this job description for an “opera-
tions analyst.” The job is to design,
conduct, and participate in major
work standards and systems analyses covering a wide vari-
ety of government functions. Considerable flexibility is al-
lowed in this job for designing and conducting each study.
Assignments are comprehensive and entail interactions
between major government and civic organizational units.
The duties also involve substantial contact with high-level
government officials, so writing and presentation skills are
essential.
Operations Analyst for City of Phoenix, Arizona
Essential Job Requirements:
Designs systems, procedures, forms, and work measure-
ments to effect methods improvement, work simplification,
improvement of manual processing, or for adaption to com-
puter processing;
• Designs control reporting systems for use in unit mea-
surement for evaluation of performance and for deter-
mination of staffing levels and recommends staffing
levels to section chief;
• Studies operational problems such as office space utiliza-
tion, equipment utilization, management reporting sys-
tems, staffing patterns, process efficiency, and prepares
written recommendations for changes and/or improve-
ments;
• Develops project plans to achieve established objectives
and time schedules;
• Writes and/or edits manuals for uniform use of new or
revised procedures and policies;
• Evaluates office machines and office or heavy operations
equipment relative to quality, price, and determination of
best equipment;
• Organizes, authors, and presents oral and written research
reports;
• Identifies work elements in detail and develops complex
flow charts, work standards, and work method improve-
ments;
• Demonstrates continuous effort to improve operations,
decrease turnaround times, streamline work processes,
and work cooperatively and jointly to provide quality
seamless customer service.
Required Knowledge, Skills and Abilities:
• Principles of work measurement and activity analysis.
• Principles of statistical methods and techniques.
• Employ work measurement techniques, i.e., stopwatch,
pre-determined data, and time ladders.
• Understand and carry out oral and written instruction pro-
vided in the English language.
• Conduct studies and research with minimal supervision.
• Complete assignments with independent thought and ac-
tion within the scope of specific assignments.
• Work cooperatively with other City employees, outside
regulatory agencies, and the public.
• Enter data or information into a terminal, PC, or other
keyboard device using various software packages.
• Communicate orally with customers, co-workers, and the
public in face-to-face one-on-one settings, in group set-
tings, or using a telephone.
• Produce written documents with clearly organized
thoughts using proper English sentence construction,
punctuation, and grammar.
A6 Supplementary Chapter A: Work Measurement, Learning Curves, and Standards

Exhibit A.1
Faucet Stem Assembly

Exhibit A.2
Operations Activity Chart of
Faucet Stem Assembly

Because these “micromotions” are typically so small that it would be difficult

to measure them easily, we usually combine several smaller work tasks into larger
activities. For instance, the tasks “get washer” and “insert washer” might be com-
bined. This leads to the following set of work activities:
1. Get housing and stem.
2. Screw in stem.
3. Get and insert washer.
4. Get and insert screw.
5. Tighten screw.
6. Place completed assembly in tray.
Supplementary Chapter A: Work Measurement, Learning Curves, and Standards A7

To determine the sample size needed for a time study, suppose we desire a 90
percent probability that the value of the sample mean provides a sampling error of
.01 minute or less. Further assume that  is estimated from historical experience
to be .019. Therefore, 
.10, z.05
1.645, and E
.01. Using Equation (A.3),
we compute
n
(1.645)2(.019)2/(.01)2
9.8
10 observations
A sample size of 10 or more will provide the required precision. (Fractional values
of n should always be rounded upward to ensure that the precision is at least as
good as desired.)
A spreadsheet that can be used for a typical time study when continuous tim-
ing is used is shown in Exhibit A.3. Continuous timing involves starting the clock
at the beginning of each task and recording the cumulative time at the completion
of each work task. The task times are found by subtracting successive cumula-
tive times. These are added and averaged to obtain the mean time for each work
task. Performance ratings are given in the next-to-last column. By multiplying the
performance-rating factor by the average observed time, we obtain the normal time
for each work task and add them. Next the allowances are determined to compute
the standard time. For the faucet-stem assembly, we assume a 5 percent personal
allowance, 5 percent fatigue allowance, and 10 percent delay of materials allowance.
Therefore, the total allowance factor is 20 percent.
The standard time for the faucet assembly job is then computed, using Equation
(A.2), as: Standard time
(0.550)(1  .2)
0.660 minutes per faucet assembly.
Thus, an assembler of faucet-stem assemblies can be expected to produce at a
standard rate of 1/0.660 parts per minute, or about 91 parts per hour. In a 7-hour

Exhibit A.3 A Spreadsheet for Time Study (Time Study Chart.xls)

A8 Supplementary Chapter A: Work Measurement, Learning Curves, and Standards

workday with 1 hour off for lunch and breaks, an assembler can produce
(7)(91)
637 faucet-stem assemblies per workday.

Using Regression Analysis to Determine Standard Time

Regression analysis provides an alternative method to estimating the time required
to do a particular job or work activity. Regression analysis is used to predict times
based on different attributes of the work, rather than by adding up individual task
times. Using regression to estimate standard times can be advantageous because it
avoids the assumption of additive task times when this might not hold; statistically
significant variables can be determined; confidence intervals for the prediction can
be developed; and finally, it may cost less than a detailed work study.
Consider the following problem on developing standard time estimates for in-
stalling electrical power lines. An electric power company wishes to determine a
standard time-estimating formula for installing power lines. A good formula would
help it plan capacity and staffing needs. The following data are collected:

Total Number Wire No. of No. of No. of

Time (hours) of Poles (100 feet) Cross Arms Insulators Guy wires
8.0 1 4 1 2 1
14.0 2 10 2 4 0
17.5 3 6 3 6 1
7.0 1 2.5 2 3 0
16.0 2 10 4 6 0
37.5 4 24 8 12 2
39.5 4 33 7 11 1
10.5 1 3 2 4 2
17.0 2 8 4 8 1
23.5 3 12 6 12 0
16.5 2 12 2 4 1
22.0 3 18 3 6 0
8.5 1 5 2 3 0
28.5 4 12 8 12 0

Exhibit A.4 shows the results using Excel’s Regression tool. The model obtained
from this analysis is
Time
0.237  2.804 Poles  0.514 Wire  1.09 Cross arms 
0.170 Insulators  1.50 Guy wires
The regression analysis shows a high R2 value, showing a strong fit to the data.
Moreover, the p values for the regression coefficients are significant, meaning that
each of the variables contributes to predicting time. If the utility faces a situation
in which it estimates installation of 4 poles, 1,500 feet of wire, 7 cross arms, 12
insulators, and no guy wires, the predicted time for the job would be
Time
0.237  2.804  4  0.514  1500  1.09  7  0.170  12
 1.50  0
792 hours

Predetermined Time Standard Methods

Predetermined time standards describe the amount of time necessary to accomplish
specific movements (called micromotions), such as moving a human hand a certain
distance or lifting a 1-pound part. These small time estimates have been documented
and are available in books and electronic tables. If a job, work activity, or task can
be broken down into such elemental tasks, an estimate of the normal time is made
by adding up these predetermined times. This approach is especially appealing for
developing standard times for new manufactured goods and some service tasks. An
Supplementary Chapter A: Work Measurement, Learning Curves, and Standards A9

Exhibit A.4 Results of Regression Analysis for Electric Power Line Installation

electronics manufacturer, for example, may have much experience with assembling
small electronic components using human labor and keep a record of past micro-
motion and normal time analyses. For similar new tasks and electronic component
parts, predetermined time standards can be used to estimate new normal times. Pre-
determined time standards were originally developed for labor-intensive human
tasks but data sets exist for machine micromovements, such as those involving an
automated drill press.
Predetermined time standards are advantageous since they cost less than a stop-
watch time study, avoid needing multiple performance ratings, and are best for new
goods and services. However, this type of micromotion-based time standard is not
justified for small order sizes or infrequent production runs. In addition, once the
new good or service and its associated process are stable and running well, stop-
watch or work-sampling time studies still need to be done. Finally, the assumption
of additivity is sometimes questionable, since a process or assembly sequence of dif-
ficult versus simple micromotions may or may not be additive.

The Debate Over Work Standards

Work standards evolved at the turn of the twentieth century, and although they
have supported significant gains in productivity, they have been the subjects of
debate since the quality revolution began in the United States. Critics such as
W. Edwards Deming have condemned work standards on the basis that they destroy
intrinsic motivation in jobs and rob workers of the creativity necessary for contin-
uous improvement. That is certainly true when managers dictate standards in an
effort to meet numerical goals set up by their superiors. However, the real culprit
in that case is not the standards themselves, but managerial style. The old style of
A10
Work sampling is a method
of randomly observing work
over a period of time to
obtain a distribution of the
activities that an individual or
a group of employees
perform.
Supplementary Chapter A: Work Measurement, Learning Curves, and Standards
managing reflects Taylor’s philosophy: Managers and engineers think, and work-
ers do what they are told. A total quality approach suggests that empowered work-
ers can manage their own processes with help from managers and professional staff.
Experience at GM’s NUMMI plant has shown that work standards can have
very positive results when they are not imposed by dictum, but designed by the
workers themselves in a continuous effort to improve productivity, quality, and
skills.3 At the GM-Fremont plant, industrial engineers performed all of the meth-
ods analysis and work-measurement activities, designing jobs as they saw fit. When
the industrial engineers were performing motion studies, workers would naturally
slow down and make the work look harder. At NUMMI, team members learned
techniques of work analysis and improvement, then timed one another with stop-
watches, looking for the safest, most efficient way to do each task at a sustainable
pace. They picked the best performance, broke it down to its fundamental elements,
and then explored ways to improve the task. The team compared the analyses with
those from other shifts at the same workstation, and wrote detailed specifications
that became the work standards. Results were excellent. From a total quality per-
spective, this was simply an approach to reduce variability. In addition, safety and
quality improved, job rotation became more effective, and flexibility increased.
Work Sampling
Work sampling is a method of randomly observing work over a period of time to
obtain a distribution of the activities that an individual or a group of employees
perform. Work sampling determines the proportion of time spent doing certain
activities on a job. It can be used to determine the percentage of idle time and also
as a means of assessing nonproductive time to determine performance ratings or
to establish allowances. Work sampling is based on the binomial probability dis-
tribution, because it is concerned with the proportion of time that a certain activ-
ity occurs. Thus, the sample size (n) for a work-sampling study is found by using
Equation (A.4):
n  (z /2)2p(1  p)/E2 (A.4)
where p is an estimate of the population proportion of the binomial distribution.
Obviously, p will never be known exactly, since it is the population parameter we
are trying to estimate. We can choose a value for p from past data, a preliminary
sample, or a subjective estimate. If p is difficult to determine in those ways, we can
select p
0.5, since it gives us the largest value for p(1  p) and therefore pro-
vides the largest and most conservative sample size.
To illustrate work sampling, consider the secretarial staff in a college depart-
ment office. The secretaries spend their time in various ways, such as
1. answering the telephone,
2. typing drafts of technical papers,
3. revising technical papers,
4. talking to students,
5. duplicating class handouts,
6. other productive activities,
7. personal time,
8. idle periods.
Suppose that a new voice-activated word processing software could greatly increase
productivity in typing, spell checking, and revising technical papers. However, the
purchase of this product is not justified unless it is used a significant percentage of
the time. To determine the percentage of time secretaries spend performing the rel-
evant work activities, we could observe them at random times and record their ac-
tivities. If 100 observations are taken, we might get the results in Exhibit A.5.
Supplementary Chapter A: Work Measurement, Learning Curves, and Standards A11

Exhibit A.5
Activity Frequency Work Sampling Activity
Frequency Data
Answering the telephone 14
Typing drafts 21
Revising papers 7
Talking to students 10
Duplicating 15
Other productive activity 25
Personal 6
Idle 2

Total 100

The percentage of time spent typing or revising is 21 percent  7 percent
28 per-

cent. To determine the needed sample size (that is, the number of observations), sup-
pose we want to estimate the proportion of time spent typing to 5 percent, with
a 95 percent probability. We use Equation (A.4), with E
0.05 and z /2
1.96.
Suppose the head secretary estimates that 40 percent of the time is spent typing. This
provides a value for p of 0.4. Then the needed sample size using Equation (A.4) is
n  (1.96)20.4(1  0.4)/0.052
368.8 or at least 369 observations
If that is to be done over a 1-week (40-hour) period, it represents approximately 9
observations per hour (9.225, to be exact). The observations should be taken ran-
domly when work is at a normal level (not during the spring break!).
To take a random sample, we can use the table of random digits in Appendix C.
There are several ways to use random digits in deciding when to take observations.
For this example, an average of 9.225 observations per hour requires the observa-
tions to be spaced, on the average (60/9.225)
6.5 minutes apart. We should not
take observations exactly 6.5 minutes apart, however, for then the sample would
not be random. Suppose observations are between 3 and 10 minutes apart. If they
are random, the average is 6.5 minutes. We can use the random digits as follows.
Suppose the first observation is taken at 9:00. We choose numbers from the first
row of Appendix C to find how many minutes later we should take the next obser-
vation (0 represents 10 minutes, and we discard any 1s or 2s). For instance, the first
number is 6; thus we take the next observation at 9:06. The next number is 3, so
the third observation is made at 9:09. We discard the 2 and take the next observa-
tion 7 minutes later, at 9:16. We see that the time and cost required to take a ran-
dom sample can be significant; that is one of the disadvantages of random sampling.
Work sampling is based on statistics, and like all statistical procedures, it can
suffer from sampling error and lead to erroneous conclusions simply by chance.
Also, as the famous Hawthorne experiments showed, people often change their be-
havior when being observed, and this can influence the results. Thus, work sam-
pling should be used with caution.

LEARNING CURVES Learning Objective

To understand the concept of
learning curves and how they can
The learning curve concept is that direct labor unit cost decreases in a predictable
affect business decisions, and to
manner as the experience in producing the unit increases. For most people, for ex- learn computational methods for
ample, the longer they play a musical instrument or a video game, the better and estimating aggregate production
faster they become. The same is true in assembly operations, which was recognized times in learning environments.
in the 1920s at Wright-Patterson Air Force Base in the assembly of aircraft. Studies
showed that the number of labor hours required to produce the fourth plane was
about 80 percent of the amount of time spent on the second; the eighth plane took
A12
The learning curve concept is
that direct labor unit cost
decreases in a predictable
manner as the experience in
producing the unit increases.
A p-percent learning curve
characterizes a process in
which the time of the 2xth
unit is p percent of the time
of the xth unit.
Exhibit A.6
An 80 Percent Learning Curve
Supplementary Chapter A: Work Measurement, Learning Curves, and Standards
only 80 percent as much time as the fourth; the sixteenth plane 80 percent of the
time of the eighth, and so on. The decrease in production time as the number pro-
duced increases is illustrated in Exhibit A.6. As production doubles from x units to
2x units, the time per unit of the 2xth unit is 80 percent of the time of the xth unit.
This is called an 80 percent learning curve. Such a curve exhibits a steep initial de-
cline and then levels off as employees become more proficient in their tasks. In gen-
eral, a p-percent learning curve characterizes a process in which the time of the 2xth
unit is p percent of the time of the xth unit.
Defense industries (for example, the aircraft and electronics industries), which
introduce many new and complex products, use learning curves to estimate labor
requirements and capacity, determine costs and budget requirements, and plan and
schedule production. Eighty-percent learning curves are generally accepted as a stan-
dard, although the ratio of machine work to manual assembly affects the curve per-
centage. Obviously, no learning takes place if all assembly is done by machine. As
a rule of thumb, if the ratio of manual to machine work is 3 to 1 (three-fourths
manual), then 80 percent is a good value; if the ratio is 1 to 3, then 90 percent is
often used. An even split of manual and machine work would suggest the use of
an 85 percent learning curve. The learning factor may also be estimated from past
histories of similar parts or products.
Mathematically, the learning curve is represented by the function
y
axb (A.5)
where
x
number of units produced,
a
hours required to produce the first unit,
y
time to produce the xth unit, and
b
constant equal to ln p/ln 2 for a 100p percent learning curve.
Thus, for an 80 percent learning curve, p
0.8 and
b
ln 0.8/ln 2
(0.223)/0.693
0.322
For a 90 percent curve, p
0.9 and
b
ln 0.9/ln 2
(0.105)/0.693
0.152
Although the learning curve theory implies that improvement will continue for-
ever, in actual practice the learning curve flattens out. As management interest in
the initial creation of a new good or service decreases, employees may reach a level
Supplementary Chapter A: Work Measurement, Learning Curves, and Standards A13

of production that is expected of them and hold that rate. Another way to view
the theory of learning is that early on extraordinary new practices and methods
are found to dramatically improve performance, such as substituting plastic for
steel parts. Later in the life of the learning curve, the focus shifts to incremental
improvements.
Learning curves can apply to individual employees or, in an aggregate sense, to
the big-picture initiatives such as pricing strategy. For example, learning curves are
used to monitor employees typing and encoding checks in a bank’s operations. Each
employee must reach a certain threshold-learning rate within 6 months or more
training is required. In some cases, the bank-encoding employee is transferred to
another bank job because the employee is just not suited to the encoding job. Learn-
ing curves help managers make such decisions. From an aggregate and strategic per-
spective, a firm may use the learning-curve concept to establish a pricing schedule
that does not initially cover cost in order to gain increased market share.
Managers should realize that improvement along a learning curve does not take
place automatically. Learning-curve theory is most applicable to new products or
processes that have a high potential for improvement and when the benefits will be
realized only when appropriate incentives and effective motivational tools are used.
Organizational changes may also have significant effects on learning. Changes in
technology or work methods will affect the learning curve, as will the institution
of productivity and quality-improvement programs.
As an illustration of learning curves, suppose a manufacturing firm is intro-
ducing a new and complex machine and has determined that a 90 percent learning
curve is applicable. Estimates of demand for the next 3 years are 50, 75, and 100
units. The time to produce the first unit is estimated to be 3,500 hours. Therefore,
the learning-curve function is
y
3,500x0.152
Consequently, the time to manufacture the second unit will be
3,500 (2)0.152
3,150 hours
Exhibit A.7 gives the cumulative number of hours required to produce the 3-year
demand in increments of 25 units. Thus, to produce the 50 units in the first year,
the firm will require 112,497 hours. If we assume that each employee works 160
hours per month, or 1,920 hours per year, we find that for the first year the firm
will need
112,497/1,920
59 employees
to produce this machine. In the second year, the total number of hours required
will be the difference between the cumulative requirements for the first two years’
production (246,160 hours) and the first year’s production (112,497 hours), or
246,160  112,497
133,663 hours
So the labor requirements for the second year are
133,663 / 1,920
70 employees
Similarly, for the third year, the labor requirements are
406,112  246,160

83 employees
1,920
These are aggregate numbers; at a more detailed planning level, they will vary ac-
cording to how production is actually scheduled over the year. Also, note that the
number of employees required to produce these units increases in a nonlinear way,
A14
Exhibit A.7
Cumulative Time Required Using
Learning Curves
The experience curve states
that the cost of doing any
repetitive task, work activity,
or project decreases as the
accumulated experience of
doing the job increases.
Supplementary Chapter A: Work Measurement, Learning Curves, and Standards
Cumulative Units Cumulative Hours Required
25 61,996
50 112,497
75 159,164
100 203,494
125 246,160
150 287,545
175 327,894
200 367,374
225 406,112
reflecting the learning that is taking place among employees. For example, we might
need 59 employees to produce 50 units, 70 employees for 125, and 83 for 225.
Clearly, understanding learning is important for aggregate planning.
Values for learning-curve functions can be easily computed and summarized
through the use of tables. Exhibits A.8 and A.9 present unit values and cumulative
values, respectively, for learning curves from 60 percent through 95 percent. To
find the time to produce a specific unit, multiply the time for the first unit by the
appropriate factor in Exhibit A.8. For the 90 percent learning-curve example pre-
sented earlier, the time for the second unit is 3,500(0.9000)
3,150. The time for
the third unit is 3,500(0.8462)
2,961.7, and so on.
To find the time for a cumulative number of units, we can use Exhibit A.9.
Thus, for a 90 percent learning curve, if the time for the first unit is 3,500, the time
for the first 25 units is 3,500(17.7132)
61,996. Similarly, the time for the first
100 units is 3,500(58.1410)
203,494. The values in Exhibit A.7 were found us-
ing this table.
A broader extension of the learning curve is the experience curve. The experi-
ence curve states that the cost of doing any repetitive task, work activity, or project
decreases as the accumulated experience of doing the job increases. The terms im-
provement curve, experience curve, and manufacturing progress function are often
used to describe the learning phenomenon in the aggregate context. Marketing re-
search, software design, developing engineering specifications for a water plant, ac-
counting and financial auditing of the same client, implementing a software
integration project, and so on are examples of this broader view. The idea is that
each time experience doubles, costs decline by 10 percent to 30 percent. Costs must
always be translated into constant dollars to eliminate the inflation effect. Of course,
the learning or experience curve does not continue this dramatic decrease in time
and costs indefinitely, and at some point begins to flatten out.
Practical Issues in Using Learning Curves
The following ten factors can affect the applicability of the learning or experience
curve and/or the amount of learning that occurs. Good management judgment is
required to recognize these factors and take appropriate action, including stopping
the current learning-curve analysis, beginning a new learning-curve analysis, and/or
using other planning methods for the remainder of the work.
1. The learning curve does not usually apply to supervisory personnel, some skilled
craftspeople, or jobs that have nonrepetitive job tasks.
2. A change in the ratio of indirect labor or supervisory talent to direct labor can
alter the rate of learning.
3. The institution of incentive systems, bonus plans, quality initiatives, empower-
ment, and the like may increase learning.
Supplementary Chapter A: Work Measurement, Learning Curves, and Standards A15

Exhibit A.8
p .60 .65 .70 .75 .80 .85 .90 .95 Unit Values for Learning Curves
x b .737 .621 .515 .415 .322 .234 .152 .074
1 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000
2 0.6000 0.6500 0.7000 0.7500 0.8000 0.8500 0.9000 0.9500
3 0.4450 0.5052 0.5682 0.6338 0.7021 0.7729 0.8462 0.9219
4 0.3600 0.4225 0.4900 0.5625 0.6400 0.7225 0.8100 0.9025
5 0.3054 0.3678 0.4368 0.5127 0.5956 0.6857 0.7830 0.8877
6 0.2670 0.3284 0.3977 0.4754 0.5617 0.6570 0.7616 0.8758
7 0.2383 0.2984 0.3674 0.4459 0.5345 0.6337 0.7439 0.8659
8 0.2160 0.2746 0.3430 0.4219 0.5120 0.6141 0.7290 0.8574
9 0.1980 0.2552 0.3228 0.4017 0.4929 0.5974 0.7161 0.8499
10 0.1832 0.2391 0.3058 0.3846 0.4765 0.5828 0.7047 0.8433
11 0.1708 0.2253 0.2912 0.3696 0.4621 0.5699 0.6946 0.8374
12 0.1602 0.2135 0.2784 0.3565 0.4493 0.5584 0.6854 0.8320
13 0.1510 0.2031 0.2672 0.3449 0.4379 0.5480 0.6771 0.8271
14 0.1430 0.1940 0.2572 0.3344 0.4276 0.5386 0.6696 0.8226
15 0.1359 0.1858 0.2482 0.3250 0.4182 0.5300 0.6626 0.8184
16 0.1296 0.1785 0.2401 0.3164 0.4096 0.5220 0.6561 0.8145
17 0.1239 0.1719 0.2327 0.3085 0.4017 0.5146 0.6501 0.8109
18 0.1188 0.1659 0.2260 0.3013 0.3944 0.5078 0.6445 0.8074
19 0.1142 0.1604 0.2198 0.2946 0.3876 0.5014 0.6392 0.8042
20 0.1099 0.1554 0.2141 0.2884 0.3812 0.4954 0.6342 0.8012
21 0.1061 0.1507 0.2087 0.2826 0.3753 0.4898 0.6295 0.7983
22 0.1025 0.1465 0.2038 0.2772 0.3697 0.4844 0.6251 0.7955
23 0.0992 0.1425 0.1992 0.2722 0.3644 0.4794 0.6209 0.7929
24 0.0961 0.1387 0.1949 0.2674 0.3995 0.4747 0.6169 0.7904
25 0.0933 0.1353 0.1908 0.2629 0.3548 0.4701 0.6131 0.7880
30 0.0815 0.1208 0.1737 0.2437 0.3346 0.4505 0.5963 0.7775
35 0.0728 0.1097 0.1605 0.2286 0.3184 0.4345 0.5825 0.7687
40 0.0660 0.1010 0.1498 0.2163 0.3050 0.4211 0.5708 0.7611
45 0.0605 0.0939 0.1410 0.2060 0.2936 0.4096 0.5607 0.7545
50 0.0560 0.0879 0.1336 0.1972 0.2838 0.3996 0.5518 0.7486
55 0.0522 0.0829 0.1272 0.1895 0.2753 0.3908 0.5438 0.7434
60 0.0489 0.0785 0.1216 0.1828 0.2676 0.3829 0.5367 0.7386
65 0.0461 0.0747 0.1167 0.1768 0.2608 0.3758 0.5302 0.7342
70 0.0437 0.0713 0.1123 0.1715 0.2547 0.3693 0.5243 0.7302
75 0.0415 0.0683 0.1084 0.1666 0.2491 0.3634 0.5188 0.7265
80 0.0396 0.0657 0.1049 0.1622 0.2440 0.3579 0.5137 0.7231
85 0.0379 0.0632 0.1017 0.1582 0.2393 0.3529 0.5090 0.7198
90 0.0363 0.0610 0.0987 0.1545 0.2349 0.3482 0.5046 0.7168
95 0.0349 0.0590 0.0960 0.1511 0.2308 0.3438 0.5005 0.7139
100 0.0336 0.0572 0.0935 0.1479 0.2271 0.3397 0.4966 0.7112
125 0.0285 0.0498 0.0834 0.1348 0.2113 0.3224 0.4800 0.6996
150 0.0249 0.0444 0.0759 0.1250 0.1993 0.3089 0.4669 0.6902
175 0.0222 0.0404 0.0701 0.1172 0.1896 0.2979 0.4561 0.6824
200 0.0201 0.0371 0.0655 0.1109 0.1816 0.2887 0.4469 0.6757
225 0.0185 0.0345 0.0616 0.1056 0.1749 0.2809 0.4390 0.6698
250 0.0171 0.0323 0.0584 0.1011 0.1691 0.2740 0.4320 0.6646
275 0.0159 0.0305 0.0556 0.0972 0.1639 0.2680 0.4258 0.6599
300 0.0149 0.0289 0.0531 0.0937 0.1594 0.2625 0.4202 0.6557
350 0.0133 0.0262 0.0491 0.0879 0.1517 0.2532 0.4105 0.6482
400 0.0121 0.0241 0.0458 0.0832 0.1453 0.2454 0.4022 0.6419
450 0.0111 0.0224 0.0431 0.0792 0.1399 0.2387 0.3951 0.6363
500 0.0103 0.0210 0.0408 0.0758 0.1352 0.2329 0.3888 0.6314
550 0.0096 0.0198 0.0389 0.0729 0.1312 0.2278 0.3832 0.6269
600 0.0090 0.0188 0.0372 0.0703 0.1275 0.2232 0.3782 0.6229
650 0.0085 0.0179 0.0357 0.0680 0.1243 0.2190 0.3736 0.6192
700 0.0080 0.0171 0.0344 0.0659 0.1214 0.2152 0.3694 0.6158
750 0.0076 0.0163 0.0332 0.0641 0.1187 0.2118 0.3656 0.6127
800 0.0073 0.0157 0.0321 0.0624 0.1163 0.2086 0.3620 0.6098
850 0.0069 0.0151 0.0311 0.0508 0.1140 0.2057 0.3587 0.6070
900 0.0067 0.0146 0.0302 0.0594 0.1119 0.2029 0.3556 0.6045
A16 Supplementary Chapter A: Work Measurement, Learning Curves, and Standards

Exhibit A.9 Cumulative Unit Values for Learning Curves

x p
.60 p
.65 p
.70 p
.75 p
.80 p
.85 p
.90 p
.95

1 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000
2 1.6000 1.6500 1.7000 1.7500 1.8000 1.8500 1.9000 1.9500
3 2.0450 2.1552 2.2682 2.3838 2.5021 2.6229 2.7462 2.8719
4 2.4050 2.5777 2.7582 2.9463 3.1421 3.3454 3.5562 3.7744
5 2.7104 2.9455 3.1950 3.4591 3.7377 4.0311 4.3392 4.6621
6 2.9774 3.2739 3.5928 3.9345 4.2994 4.6881 5.1008 5.5380
7 3.2158 3.5723 3.9601 4.3804 4.8339 5.3217 5.8447 6.4039
8 3.4318 3.8469 4.3031 4.8022 5.3459 5.9358 6.5737 7.2612
9 3.6298 4.1021 4.6260 5.2040 5.8389 6.5332 7.2898 8.1112
10 3.8131 4.3412 4.9318 5.5886 6.3154 7.1161 7.9945 8.9545
11 3.9839 4.5665 5.2229 5.9582 6.7775 7.6860 8.6890 9.7919
12 4.1441 4.7800 5.5013 6.3147 7.2268 8.2444 9.3745 10.6239
13 4.2951 4.9831 5.7685 6.6596 7.6647 8.7925 10.0516 11.4511
14 4.4381 5.1770 6.0257 6.9940 8.0923 9.3311 10.7212 12.2736
15 4.5740 5.3628 6.2739 7.3190 8.5105 9.8611 11.3837 13.0921
16 4.7036 5.5413 6.5140 7.6355 8.9201 10.3831 12.0398 13.9066
17 4.8276 5.7132 6.7467 7.9440 9.3218 10.8977 12.6899 14.7174
18 4.9464 5.8791 6.9727 8.2453 9.7162 11.4055 13.3344 15.5249
19 5.0606 6.0396 7.1925 8.5399 10.1037 11.9069 13.9735 16.3291
20 5.1705 6.1950 7.4065 8.8284 10.4849 12.4023 14.6078 17.1302
21 5.2766 6.3457 7.6153 9.1110 10.8602 12.8920 15.2373 17.9285
22 5.3791 6.4922 7.8191 9.3882 11.2299 13.3765 15.8624 18.7241
23 5.4783 6.6346 8.0183 9.6601 11.5943 13.8559 16.4833 19.5170
24 5.5744 6.7734 8.2132 9.9278 11.9538 14.3306 17.1002 20.3074
25 5.6677 6.9086 8.4040 10.1907 12.3086 14.8007 17.7132 21.0955
30 6.0974 7.5398 9.3050 11.4458 14.0199 17.0907 20.7269 25.0032
35 6.4779 8.1095 10.1328 12.6179 15.6428 19.2938 23.6660 28.8636
40 6.8208 8.6312 10.9024 13.7232 17.1935 21.4252 26.5427 32.6838
45 7.1337 9.1143 11.6245 14.7731 18.6835 23.4955 29.3658 36.4692
50 7.4222 9.5654 12.3069 15.7761 20.1217 25.5131 32.1420 40.2239
55 7.6904 9.9896 12.9553 16.7386 21.5147 27.4843 34.8766 43.9511
60 7.9413 10.3906 13.5742 17.6658 22.8678 29.4143 37.5740 47.6535
65 8.1774 10.7715 14.1674 18.5617 24.1853 31.3071 40.2377 51.3333
70 8.4006 11.1347 14.7376 19.4296 25.4708 33.1664 42.8706 54.9924
75 8.6123 11.4823 15.2874 20.2722 26.7273 34.9949 45.4753 58.6323
80 8.8140 11.8158 15.8188 21.0921 27.9572 36.7953 48.0539 62.2544
85 9.0067 12.1367 16.3335 21.8910 29.1628 38.5696 50.6082 65.8599
90 9.1912 12.4461 16.8329 22.6708 30.3459 40.3198 53.1399 69.4498
95 9.3683 12.7451 17.3182 23.4329 31.5081 42.0474 55.6504 73.0250
100 9.5388 13.0345 17.7907 24.1786 32.6508 43.7539 58.1410 76.5864
125 10.3079 14.3614 19.9894 27.6971 38.1131 52.0109 70.3315 94.2095
150 10.9712 15.5326 21.9722 30.9342 43.2335 59.8883 82.1558 111.5730
175 11.5576 16.5883 23.7917 33.9545 48.0859 67.4633 93.6839 128.7232
200 12.0853 17.5541 25.4820 36.8007 52.7000 74.7885 104.9641 145.6931
225 12.5665 18.4477 27.0669 39.5029 57.1712 81.9021 116.0319 162.5066
250 13.0098 19.2816 28.5638 42.0833 61.4659 88.8328 126.9144 179.1824
275 13.4216 20.0653 29.9855 44.5588 65.6246 95.6028 137.6327 195.7354
300 13.8068 20.8059 31.3423 46.9427 69.6634 102.2301 148.2040 212.1774
350 14.5112 22.1796 33.8916 51.4760 77.4311 115.1123 168.9596 244.7667
400 15.1451 23.4362 36.2596 55.7477 84.8487 127.5691 189.2677 277.0124
450 15.7230 24.5987 38.4799 59.8030 91.9733 139.6656 209.1935 308.9609
500 16.2555 25.6835 40.5766 63.6753 98.8473 151.4506 228.7851 340.6475
550 16.7500 26.7028 42.5680 67.3900 105.5032 162.9622 248.0809 372.1002
600 17.2125 27.6662 44.4684 70.9671 111.9671 174.2309 267.1118 403.3421
650 17.6474 28.5808 46.2889 74.4225 118.2598 185.2815 285.9030 434.3918
700 18.0583 29.4528 48.0387 77.7693 124.3985 196.1346 304.4757 465.2653
750 18.4482 30.2869 49.7254 81.0183 130.3976 206.8073 322.8479 495.9759
800 18.8193 31.0871 51.3552 84.1786 136.2693 217.3144 341.0347 526.5353
850 19.1737 31.8568 52.9333 87.2580 142.0242 227.6687 359.0497 556.9538
900 19.5131 32.5989 54.4644 90.2631 147.6709 237.8811 376.9043 587.2402
Supplementary Chapter A: Work Measurement, Learning Curves, and Standards A17

4. Changes in product design, raw material usage, technology, and/or the process
may significantly alter the learning curve.
5. Humans learn simple task(s) quickly and reach a limit on learning for the task(s),
but for complex intellectual task(s) such as software programming, learning is
less limited and may continue. The first type of learning is described with an
exponential curve; the more complex learning is sometimes described by an S-
shaped curve.
6. A contract phaseout may result in a lengthening of processing times for the last
units produced, since employees want to prolong their income period.
7. The lack of proper maintenance of tools and equipment, the nonreplacement of
tools, or the aging of equipment can have a negative impact on learning.
8. Keeping groups of employees together, such as highly specialized consulting
groups, reaps a productivity benefit but may stifle innovation and new experi-
ences.
9. The transfer of employees may result in an interruption or a regression to an
earlier stage of the learning curve or may necessitate a new learning curve.
10. Learning curves focus on direct labor and ignore indirect labor that also con-
tributes to efficiency and effectiveness.

SOLVED PROBLEMS

SOLVED PROBLEM #1
Assume your first job out of school is as a branch
manager for a major bank. Your branch also has a back-
office operation where bank packs of $300 are assem-
bled for retail businesses. Each bank pack contains two
$20 bills, ten $10 bills, twelve $5 bills, and one hun-
dred $1 bills. Retail customers become upset when these
bank packs are not available since they usually pick
them up before their retail store opens. A continuous
stopwatch study collected the information shown in the
table below. The policy of the bank is to use a 20 per-
cent allowance factor for branch bank operations. (a)
What is the normal and standard time for a bank pack?
(b) How long would it take to pack 200 packs? Now
you must decide how many branch bank staff to assign
to this work activity and when they will do the work.
Solution:
a. To determine the normal and standard times, note
that the continuous stopwatch study timed each
denomination separately and the cumulative times
are shown across each row. The “Difference” rows
show the individual times.
b. (200 bank packs)(31.426 minutes)/10 bank packs

(20)(31.426 minutes)
628.5 minutes or
10.5 hours

Observation Cycles (cumulative, in minutes) Performance Normal

Work Task 1 2 3 4 5 6 7 8 9 Average Rating Time
Count 2 $20s 0.11 0.15 0.36 0.5 0.65 0.78 0.89 1.02 1.22
Difference 0.11 0.21 0.14 0.15 0.13 0.11 0.13 0.20 0.15 1.15 0.170
Count 10 $10s 0.25 0.66 0.94 1.27 1.79 2.05 2.36 2.77 3.20
Difference 0.25 0.28 0.33 0.52 0.26 0.31 0.41 0.43 0.35 0.95 0.331
Count 12 $5s 0.37 0.79 0.93 1.44 1.91 2.30 2.88 3.61 4.22
Difference 0.37 0.14 0.51 0.47 0.39 0.58 0.73 0.61 0.48 1.00 0.475
Count 100 $1s 1.02 2.44 3.70 5.01 6.39 8.11 9.43 10.55 11.55
Difference 1.02 1.26 1.31 1.38 1.72 1.32 1.12 1.00 1.27 1.10 1.393
Place Bank Packs in Tray (once every ten cycles)
2.50 1.00

Normal processing (run) time per bank pack
2.369

Normal time per ten bank packs with setup
26.188

Standard time per bank pack
Normal time  (1  Allowances)
2.8426

Standard time per ten bank packs with setup
31.426
A18 Supplementary Chapter A: Work Measurement, Learning Curves, and Standards

SOLVED PROBLEM #2
In a work-sampling study an administrative assistant
was found to be working 2,700 times in a total of 3,000
observations made over a time span of 240 working
hours. The employee’s output was 1,800 forms. If a per-
formance rating of 1.05 and an allowance of 15 per-
cent are given, what is the standard output for this task?
Solution:
Effective number of hours worked
2,700(240)/3,000

216.
Output during this period
1,800 forms.
Actual time per form
216(60)/1,800
7.2 minutes,
or 8.33 forms per hour.
Normal time
Actual observed time  Performance
rating
7.2(1.05)
7.56 minutes.
Standard time
7.56(1.15)
8.694 minutes per
form.
Standard output
60/8.694
6.9 forms per hour,
or 55 forms per 8-hour day.

SOLVED PROBLEM #3
A yacht manufacturer has been commissioned to build Unit Time Required
five sailboats for a Florida resort. The first boat took 1 6,000
6,000 labor-hours to build. How many labor-hours will 2 5,400
it take to complete the order, assuming that a 90 per- 3 5,077
cent learning curve is applicable? 4 4,860
5 4,698

Solution: Total 26,035 hours

Using a 90 percent learning curve, we have the times
listed here: Or, using Exhibit A.9, 6,000(4.3392)
26,035 hours.

KEY TERMS AND CONCEPTS

Allowance factor Regression method

Experience curve Sample-size computations
Learning curve Standard time
Normal time Tasks and work activities
Operations activity chart Time-study method
Performance rating factor Work measurement
Predetermined time standards Work-sampling method

QUESTIONS FOR REVIEW AND DISCUSSION

1. What is work measurement? How can it be used to 4. Do you think the following jobs require standard
improve organizational performance? times? Explain your reasoning.
2. Explain the concept of normal time. How can an a. Carpet installers
operations manager verify whether the time to per- b. Software programmers
form a task is indeed “normal”? c. Cable T.V. installers
3. How does standard time differ from normal time? d. Hotel maids
How are standard times used in operations man- e. Bank tellers
agement? f. Airline flight attendants
Supplementary Chapter A: Work Measurement, Learning Curves, and Standards A19

g. Dentists 10. If you have worked for an organization that used

h. Medical doctors time standards, provide a short description of how
i. Restaurant reservations it was used or affected your work. What were the
j. Telephone call center representatives pros and cons of the job and working under stan-
5. Explain how regression analysis can be used to es- dard times? Where the times accurate? How were
tablish standard times. they determined?

6. Select one of the jobs in Question 4 and describe 11. Explain work sampling. Discuss some applications
what data are needed to use regression analysis to of work sampling in both manufacturing and ser-
develop normal times. vice organizations.

7. What is time study? Describe the basic procedure 12. Explain the concept of learning curves. Why are they
for conducting a time study. important in managing operations?

8. How do predetermined time standards differ from 13. What types of jobs are best suited to the application
those found through a stopwatch time study? of learning curves? How would you determine this?

9. Why are work standards the subject of much de- 14. What is the experience curve and how does it differ
bate? Do some research into arguments and issues from the traditional learning curve?
raised by unions to provide an additional basis for 15. Discuss some practical issues that managers must
your response. consider in using learning curves.

PROBLEMS AND ACTIVITIES

1. What sample sizes should be used for these time processing time of a single order form has an error
studies? of 0.05 minute? There is no estimate of the clerical
a. There should be a .95 probability that the value staff’s proportion of productive time.
of the sample mean is within 2 minutes, given 4. Exhibit A.10 shows a partially completed time-study
that the standard deviation is 4 minutes. worksheet. Determine the standard time for this op-
b. There should be a 90 percent chance that the eration.
sample mean has an error of 0.10 minutes or
less when the variance is estimated as 0.50 min- 5. Using a rating factor of 1.00, compute the normal
utes. time for drilling a hole in a steel plate if these are
the observed times (in minutes):
2. Compute the number of observations required in a
work-sampling study if the standard deviation is 0.2 0.24 0.25 0.29 0.24 0.27
minute and there should be a 90 percent chance that 0.25 0.245 0.19 0.20 0.23
the sample mean has an error of (a) 0.15 minute,
(b) 0.10 minute, and (c) 0.005 minute. 6. Using a fatigue allowance of 20 percent, and given
3. In a work-sampling study, what sample size should the following time-study data obtained by continu-
be used to provide 95 percent probability that the ous time measurement, compute the standard time.

Table for Problem 6.

Cycle of Observation
Activity 1 2 3 4 5 Performance Rating
Get casting 0.21 2.31 4.41 6.45 8.59 0.95
Fix into fixture 0.48 2.59 4.66 6.70 8.86 0.90
Drilling operation 1.52 3.65 5.66 7.74 9.90 1.00
Unload 1.73 3.83 5.91 7.96 10.10 0.95
Inspect 1.98 4.09 6.15 8.21 10.30 0.80
Replace 2.10 4.20 6.25 8.34 10.42 1.10
A20 Supplementary Chapter A: Work Measurement, Learning Curves, and Standards

Exhibit A.10 Time Study Worksheet for Problem 4

Time Study Chart

Normal
Work element 1 2 3 4 5 6 7 8 9 Sum Avg Rating time

Cumulative time .09 .12 .06 .11 .10 .09 .13 .12 .13
A 1.05
Element time

Cumulative time .23 .28 .21 .20 .24 .22 .26 .25 .25
B 1.00
Element time

Cumulative time .46 .49 .46 .44 .47 .47 .49 .46 .48
C .90
Element time
Cumulative time .61 .66 .62 .59 .69 .67 .67 .66 .70
D .85
Element time
Cumulative time .70 .74 .72 .68 .79 .80 .76 .78 .81
E 1.00
Element time

Cumulative time 1.00 1.02 .98 .99 1.07 1.09 1.02 1.06 1.09
F 1.10
Element time

Sum
Allowances: Personal 5% Standard Time __________
Fatigue 5%
Delay 5%

7. Provide the data missing from the following infor- 11. Linda Bryant recently started a small home-
mation. Time is in minutes. construction company. In an effort to foster high
quality, rather than subcontracting individual work,
Actual Normal Standard Performance Fatigue she has formed teams of employees who are re-
Time Time Time Rating Allowance sponsible for the entire job. She has contracted with
10.6 _____ _____ 1.06 20% a developer to build 20 homes of similar type and
7.8 7.2 _____ _____ 15% size. She has four teams of workers. The first homes
6.5 _____ 7.98 1.05 _____ were built in an average of 145 days. How long will
2 _____ _____ 1.10 15% it take to complete the contract if an 85 percent
learning curve applies?
8. A part-time employee who rolls out dough balls at
12. Suppose a manufacturer of copiers has concluded
a pizza restaurant was observed over a 40-hour
that a 75 percent learning curve applies to the time
period for a work-sampling study. During that time,
a beginning service technician takes to install copy
she prepared 550 pieces of pizza dough. The ana-
machines. If the time required to install the first copy
lyst made 50 observations and found the employee
machine is estimated to be 4 hours, what is an esti-
not working four times. The overall performance
mate of the time required by a new technician to in-
rating was 1.10. The allowance for the job is 15 per-
stall the second and third copiers?
cent. Based on these data, what is the standard time
in minutes for preparing pizza dough? 13. A manufacturer has committed to supply 16 units
of a particular product in 4 months (that is, 16
9. How many observations should be made in a work-
weeks) at a price of $30,000 each. The first unit
sampling study to obtain an estimate within 10 per-
took 1,000 hours to produce. Even though the sec-
cent of the proportion of time spent changing tools by
ond unit took only 750 hours to produce, the man-
a production worker with a 99 percent probability?
ufacturer is anxious to know:
10. Operating at an 80 percent learning rate, the first
a. if the delivery commitment of 16 weeks will be
unit took 72 hours to produce. How long will the
met,
32nd unit take?
Supplementary Chapter A: Work Measurement, Learning Curves, and Standards A21

b. whether enough labor is available (currently 500 Apply learning-curve theory to each of those issues.
hours are available per week), Assume the material cost per unit equals $22,000;
c. whether or not the venture is profitable. labor equals $10 per labor-hour, and overhead is
$2,000 per week.

CASES

REHABILITATION HOSPITAL OF FLORIDA

A rehabilitation hospital in Florida is having trouble
retaining physical therapists. The lack of an employee
reward and recognition system and too high a work-
load are the top two reasons for the therapists leaving.
The hospital currently has no productivity measurement
system, and compensation is not based on standardized
requirements or performance. Out-of-date historical
data have been used to estimate the time per patient
type each physical therapist should spend with each
patient. These values are: head trauma patients—1.09
hours/session, spinal cord injury—1.53 hours/session,
and general rehabilitation—0.62 hour. No information
was available on the patient mix.
Stopwatch-based time studies were performed for
each of the three patient categories with 24 therapists over
a 2-month period. The normal times were determined
to be as follows: head trauma—1.24 hours/session,
spinal cord injury—2.03 hours/session, and general
rehabilitation—0.93 hour. The hospital decided to use
these revised normal times to plan its staffing levels and
incentive system.
Explain the implications of the lack of a good pro-
ductivity measurement system on the hospital’s opera-
tions management activities. How might the time-study
information be used effectively? What other informa-
tion would you want to know to conduct this time study
better and possibly compute the benefits and costs of
using the revised standard times?

THE STATE VERSUS JOHN BRACKET4

This case draws upon the first episode at the beginning The data George Davis had for justifying raising
of this chapter, which you should review at this time. Bracket’s quota are shown in Exhibit A.11. Samples #1

Exhibit A.11 Work Measurement Time Study Original Data for Rehabilitation Services Commission

Process: Invoices
Cumulative Time (ct)
Select Time (t) All times in (minutes. hundredths of seconds)

Major Sample Rating Normal Sample Rating Normal

Work Elements #1 Factor Time #2 Factor Time
Sorting/Matching t 13.09 1.00 13.09 t 22.60 1.10 24.86
ct 13.09 ct 22.60
Keying t 28.45 1.00 28.45 t 23.40 1.10 25.74
ct 41.54 ct 46.00
End-of-Day t 24.23 1.00 24.23 t 13.94 1.10 15.33
Activities ct 65.77 65.77 ct 59.94 65.93

Total Time 65.77 65.77 59.94 65.93

Number Processed 52.00 52.00 54.00 54.00

Normal Time/Invoice 1.265 1.221

(continued on the next page)

A22 Supplementary Chapter A: Work Measurement, Learning Curves, and Standards

Exhibit A.11 (Continued)

Process: Invoices
All times in (minutes. hundredths of seconds)

Major Sample Rating Normal Sample Rating Normal

Work Elements #3 Factor Time #4 Factor Time
Sorting/Matching t 8.44 1.10 9.28 t 7.43 1.20 8.92
ct 8.44 ct 7.43
Keying t 14.26 1.10 15.69 t 5.55 1.20 6.66
ct 22.70 ct 12.98
End-of-Day t 6.47 1.10 7.12 t 15.52 1.20 18.62
Activities ct 29.17 32.09 ct 28.50 34.20

Total Time 29.17 32.09 28.50 34.20

Number Processed 32.00 32.00 39.00 39.00

Normal Time/Invoice 1.003 0.877

to #4 represent four different commission employees
doing the same job as Bracket—processing commission
invoices. These data result in an average normal time
per invoice of 1.0915 minutes [(1.265  1.221  1.003
 0.877)/4]. With an allowance factor of 20 percent,
the standard time is 1.3098 (1.0915  1.2) minutes per
invoice, or 45.81 per hour. During a typical 7-hour
workday, an average employee could process 320.66
invoices per day, assuming a 1-hour lunch break.
A similar study was performed for Bracket’s invoice-
processing productivity; these results are shown in Ex-
hibit A.12. These data result in an average normal time
per invoice of 1.722 minutes [(1.808  1.452  2.032
 1.595)/4]. With an allowance factor of 20 percent,
the standard time is 2.066 (1.722  1.2) minutes per
invoice, or 29.04 per hour. During a typical 7-hour
workday, Bracket could process 203.29 invoices per
day, assuming a 1-hour lunch break.
a. Whose case is justified—Davis or Bracket? Explain.
b. What other issues should be considered?
c. Would you present these data in court? Why or why
not?
d. What are your final recommendations?

Exhibit A.12 Work Measurement Time Study Original Data for John Bracket

Process: Invoice
Cumulative Time (ct)
Select Time (t) All times in (minutes. hundredths of seconds)

Major Sample Rating Normal Sample Rating Normal

Work Elements #1 Factor Time #2 Factor Time
Sorting/Matching t 25.58 0.80 20.46 t 15.69 0.85 13.34
ct 25.58 ct 15.69
Keying t 23.92 0.80 19.14 t 27.86 0.90 25.07
ct 49.50 ct 43.55
End-of-Day t 7.00 0.80 5.60 t 8.96 0.90 8.06
Activities ct 56.50 45.20 ct 52.51 46.47

Total Time 56.50 45.20 52.51 46.47

Number Processed 25.00 25.00 32.00 32.00

Normal Time/Invoice 1.808 1.452

(continued on the next page)

Supplementary Chapter A: Work Measurement, Learning Curves, and Standards A23

Exhibit A.12 (Continued)

Process: Invoice
All times in (minutes. hundredths of seconds)

Major Sample Rating Normal Sample Rating Normal

Work Elements #3 Factor Time #4 Factor Time
Sorting/Matching t 22.12 0.85 18.80 t 19.67 1.00 19.67
ct 22.12 ct 19.67
Keying t 34.68 0.80 27.74 t 51.55 1.00 51.55
ct 56.80 ct 71.22
End-of-Day t 19.22 0.75 14.42 t 26.05 1.00 26.05
Activities ct 76.02 60.96 ct 97.27 97.27

Total Time 76.02 60.96 97.27 97.27

Number Processed 30.00 30.00 61.00 61.00

Normal Time/Invoice 2.032 1.595

ENDNOTES
1 Genovese, S. M., “Work Measurement and Process Improvement Study of Roller Coaster Preventive Maintenance,” March 23, 2003,
http://www.theroadscholars.com.
2 City of Phoenix, Arizona, Job Description, Operations Analyst, http://www.ci.phoenix.az.us/JOBSPECS/05260.html.
3 Adler, Paul S., “Time-and-Motion Regained,” Harvard Business Review Jan.–Feb. 1993, pp. 97–108.
4 Copyright © 2004, David A. Collier. All rights reserved.