A Generalized Learning Curve Adapted for Purchasing and Cost Reduction Negotiations
Author
Source
Advances in Operations Research
Issue
Vol. 2013, Issue 2013 (31 Dec. 2013), pp.1-9, 9 p.
Publisher
Hindawi Publishing Corporation
Publication Date
2013-02-13
Country of Publication
Egypt
No. of Pages
9
Main Subjects
Information Technology and Computer Science
Abstract EN
This paper presents the use and validation of a generalized learning curve in the economies of scale purchasing experience.
The model, based on Wright’s curve, incorporates two extra degrees of freedom to accommodate initial purchases of multiple (instead of single) units and a finite asymptotic price at high volumes.
The study shows that each time the part purchase quantity is doubled, the price is reduced either by a constant percentage (a learning rate) or by an approach to an asymptotic plateau rate indicating a point of diminishing returns.
Supplier price quotations at multiple purchase quantities were obtained for a pool of 17 critical parts.
The data were fitted with the generalized learning curve by the method of least squares regression.
The regressed learning rate, first unit price, and the asymptotic price can be used to infer supplier pricing strategies.
Coupled with a “should-cost” analysis based on estimates of standard time and material, a system cost reduction task was carried out by the supply chain organization.
American Psychological Association (APA)
Wong, Lam F.. 2013. A Generalized Learning Curve Adapted for Purchasing and Cost Reduction Negotiations. Advances in Operations Research،Vol. 2013, no. 2013, pp.1-9.
https://search.emarefa.net/detail/BIM-482799
Modern Language Association (MLA)
Wong, Lam F.. A Generalized Learning Curve Adapted for Purchasing and Cost Reduction Negotiations. Advances in Operations Research No. 2013 (2013), pp.1-9.
https://search.emarefa.net/detail/BIM-482799
American Medical Association (AMA)
Wong, Lam F.. A Generalized Learning Curve Adapted for Purchasing and Cost Reduction Negotiations. Advances in Operations Research. 2013. Vol. 2013, no. 2013, pp.1-9.
https://search.emarefa.net/detail/BIM-482799
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references
Record ID
BIM-482799