Experience curve

Posted in Operations and Supply Chain Terms, Total Reads: 3746

Definition: Experience curve

Experience curve is a graph showing the relation between the experainceeffect on the cost structure. The basic principle behind this is that as a firm goes on icreasing its experience it gains expertise in its operations and functions and as a result the overall cost for the firm to do a process keeps on decreasing. This idea was given the Boston Consulting Group in 1960 as a indicator for the semiconductor manufacturing firm after observing their the cost structure.

curve 2

On one axis we have number of units produced  and other have the cost of production including fixed and variable cost.

Browse the definition and meaning of more terms similar to Experience curve. The Management Dictionary covers over 7000 business concepts from 6 categories.

Search & Explore : Management Dictionary

Share this Page on: