The cost of production breaks |
| |
Authors: | Jeffrey D Camm Norman Keith Womer |
| |
Institution: | 1. Department of Quantitative Analysis and Information Systems, University of Cincinnati, Cincinnati, Ohio 45221;2. Department of Economics and Finance, University of Mississippi, University, Mississippi 38677 |
| |
Abstract: | Disruptions in the production process can have a serious impact on production costs. Most of the previous literature which addresses the cost impact of production breaks attributes the observed increase in costs solely to “loss of learning.” We develop a mathematical model which implies that breaks in the unit learning curve can occur because of a production break, even under the assumption of no forgetting. In such cases, increases in unit cost can be caused by decreasing returns as the amount of time available to meet the delivery schedule decreases due to the production break. |
| |
Keywords: | |
|
|