Learning: The missing ingredient in production planning spreadsheet models

In production (aggregate) planning, an area well suited for spreadsheet application, traditional approaches assume a constant rate of production throughout a planning period with a given work-force profile. However, the learning process which occurs as experience is gained generally yields increased productivity and a corresponding cost reduction. In many environments, models which incorporate a learning curve into the analysis are particularly appropriate. The authors demonstrate through a spreadsheet example that even a small amount of learning may dramatically increase productivity; the benefits derived may greatly outweigh any cost involved in accelerating the learning process.