Applying the Learning Curve Theory to a Project
Time and cost estimates are important to project management for the following reasons:
- Estimates are key inputs to project planning and control.
- Estimates support good decisions.
- Estimates are used to determine project duration and cost.
- Estimates are used to develop time-phased budgets and establish the project baseline.
- Without estimates you have inaccuracies, which result in time and cost under/overruns.
Most project tasks are unique and require the project manager to estimate duration/cost for each and every task separately; however, projects may also have repetitive tasks completed by the human resources assigned to the project. To estimate the labor hours/cost for these tasks the project manager may use an estimating technique that relies on learning curve theory to estimate the time and/or cost for completing repetitive tasks.
In this assignment, you will:
Task #1. Define and thoroughly discuss the Learning Curve Theory and how it applies to project management.
Task #2. Explain how you would apply the principles of the Learning Curve Theory to a real project in which you are familiar (as a project manager, team member, or one that you have read about in current events).
Task #3. Complete the following exercise on learning curves (see Page 2 of this assignment).
Instructions for completing the assignment:
· Before you begin this assignment, review the grading rubric for this assignment to understand how your work will be graded.
· Search out scholarly resources related to the subject of this assignment; use the UMUC online library databases as a start. You may also use the PMI site as a resource.
· In MS Word, compose a paper of 300-400 words (approximately 1 page) that addresses Task #1 and Task #2.
· Insert your response to the Exercise on learning curves (Task #3) and include all supporting calculations.
· Format your assignment response in accordance with APA 6th edition, include a title page and References page, and save the file as PMAN634_IA5_yourlastname.
· Submit your assignment through the Assignment folder of the course no later than 11:59 p.m. on Sunday, Week 5.
EXERCISE: Using the concept of Learning Curves for Estimating consider the following scenario and respond to each question (all work should be shown in your Word document):
Suppose that you are the estimator who is assigning costs to a major project to be undertaken this year by your firm, Acme Software Developers. One particular software development process involves many labor-hours, but the work is highly redundant. You anticipate a total of 100,000 labor-hours to complete the first iteration of the software development process and a learning curve rate of 80%. Assume you are going to use the cumulative average time in your calculations to determine the time it takes for each iteration. You are attempting to estimate the cost of the tenth iteration of this repetitive process.
Based on this information and a $60 per hour labor rate, what would you expect to budget as
A. The cost of the tenth iteration?
B. The cost of the twentieth iteration?
From Other websites:
- Evaluating the industry. (2012). In Mastering strategic management. Washington, DC: Saylor Academy. Retrieved from https://saylordotorg.github.io/text_mastering-strategic-management/s07-03-evaluating-the-industry.html
- The impact of external and internal factors on strategy. (2016, 31 May). In Boundless Management. Retrieved from https://courses.lumenlearning.com/boundless-management/chapter/strategic-management/
- Mapping strategic groups. (2012). In Mastering strategic management. Washington, DC: Saylor Academy. Retrieved from https://saylordotorg.github.io/text_mastering-strategic-management/s07-04-mapping-strategic-groups.html
- The PESTEL and SCP frameworks. (2016, 26 May). In Boundless management. Retrieved from https://courses.lumenlearning.com/boundless-management/chapter/external-inputs-to-strategy/
- The relationship between an organization and its environment. (2012). In Mastering strategic management. Washington, DC: Saylor Academy. Retrieved from https://saylordotorg.github.io/text_mastering-strategic-management/s07-01-the-relationship-between-an-or.html
- Strategic group mapping. (2010, October 5). MBA lectures. Retrieved from http://mba-lectures.com/management/strategic-management/1000/strategic-group-mapping.html
From the UMUC library: (Note: You must search for these articles in the UMUC library. In the case of video links in the UMUC library, exact directions are given on how to find the video.)
- Anand, B. N. (2006). Crafting business strategy and environmental scanning [Video]. Harvard Business School Faculty Seminar Series.
- Follow these steps to find this video:
- Go to http://sites.umuc.edu/library/index.cfm
- Type in the entire name of the article: “Crafting business strategy and environmental scanning,” into the search box and click on “search.”
- Click on “multimedia” in the upper left hand corner of the webpage (under “Ask a Librarian.)
- Type in the entire name of the article: “Crafting business strategy and environmental scanning,” in the box at the top of the page to the left of the word, “Search.”
- Make sure only “Business Videos” and “Find all my search term” are the only boxes that are checked. Uncheck both “Image Collection” and “Apply equivalent
- Click on “Search” at the bottom right hand corner of the webpage. It is a small word in a box.
- The next page shows the article. Click on the article.
- Dahab, S. (2008). Five forces. In S. R. Clegg & J. R. Bailey (Eds.), International encyclopedia of organization studies (Vol. 4, pp. 508-509). Thousand Oaks, CA: SAGE Publications Ltd. doi: 10.4135/9781412956246.n178.
- Grundy, T. (2006). Rethinking and reinventing Michael Porter’s five forces model. Strategic Change, 15(5), 213-229. doi:10.1002/jsc.764.
- Harper, G. M. (2013). Porter’s Five Forces. Salem Press encyclopedia.
- Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard Business Review, 86(1), 78-93.
From Other websites:
- Arline, K. (2015, February 18). Porter’s Five Forces: Analyzing the competition. Business News Daily. Retrieved from http://www.businessnewsdaily.com/5446-porters-five-forces.html#sthash.td8NsV4u.dpuf
- Evaluating the general environment. (2012). In Mastering strategic management. Washington, DC: Saylor Academy. Retrieved from https://saylordotorg.github.io/text_mastering-strategic-management/s07-02-evaluating-the-general-environ.html
- MindTools. (n.d.). Porter’s five forces: assessing the balance of power in a business situation. Retrieved from https://www.mindtools.com/pages/article/newTMC_08.htm
- Mullerbeck, E. (2015). SWOT and PESTEL. New York: UNICEF. Retrieved from http://www.unicef.org/knowledge-exchange/files/SWOT_and_PESTEL_production.pdf
- Porter, M. (2015). Michael Porter on competitive strategy. [Video]. Retrieved from https://www.youtube.com/watch?v=vu-cFbTsY8U
- Rachapila, T., & Jansirisak, S. (2013). Using Porter’s Five Forces model for analysing the competitive environment of Thailand’s sweet corn industry. International Journal of Business and Social Research, 3(3). Retrieved from http://thejournalofbusiness.org/index.php/site/article/view/67 (case study)
- Strategic group mapping: a mechanism for understanding the other players that operate in your field. (2016). Business Survival Toolkit. Retrieved from http://business-survival-toolkit.co.uk/stage-three/strategy-and-planning/strategic-group-mapping
- SWOT analysis: strengths, weaknesses, opportunities, and threats: tools. (2016). Community toolbox. Retrieved from http://ctb.ku.edu/en/table-of-contents/assessment/assessing-community-needs-and-resources/swot-analysis/tools