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Competitive Cost Dynamics: The Experience Curve

Author

Listed:
  • Arnoldo C. Hax

    (Alfred P. Sloan School of Management, Massachusetts Institute of Technology, 50 Memorial Drive, Cambridge, Massachusetts 02139)

  • Nicolas S. Majluf

    (Universidad Catolica de Chile, Escuela de Ingenieria, Casilla 114-D, Santiago Chile)

Abstract

This is the first of three articles about some popular tools that have been widely used since the early 1970's to support strategic decision-making. The article below deals with the experience curve; subsequent articles will deal with the growth-share matrix and the industry attractiveness-business strength matrix. These tools have inspired a degree of controversy about their uses and limitations, issues that will be explored in this and the subsequent articles.This is the first of the tutorial articles we will be publishing in Interfaces . The objective of a tutorial article is to describe an important technique or an application area for Interfaces readers who are nonexperts in the field. Please write and let me know what area(s) you would like to see covered in tutorial articles (and who you would like to see write them) and what area(s) you would be prepared to cover in a tutorial of your own.

Suggested Citation

  • Arnoldo C. Hax & Nicolas S. Majluf, 1982. "Competitive Cost Dynamics: The Experience Curve," Interfaces, INFORMS, vol. 12(5), pages 50-61, October.
    • Handle: RePEc:inm:orinte:v:12:y:1982:i:5:p:50-61
    DOI: 10.1287/inte.12.5.50
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    Citations

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    Cited by:

    1. Kim, Dong Wook & Chang, Hyun Joon, 2012. "Experience curve analysis on South Korean nuclear technology and comparative analysis with South Korean renewable technologies," Energy Policy, Elsevier, vol. 40(C), pages 361-373.
    2. van Velzen, Arjan & Annema, Jan Anne & van de Kaa, Geerten & van Wee, Bert, 2019. "Proposing a more comprehensive future total cost of ownership estimation framework for electric vehicles," Energy Policy, Elsevier, vol. 129(C), pages 1034-1046.
    3. Andreas Größler, 2020. "A managerial operationalization of antifragility and its consequences in supply chains," Systems Research and Behavioral Science, Wiley Blackwell, vol. 37(6), pages 896-905, November.
    4. Guillaume Roels, 2020. "High-Performance Practice Processes," Management Science, INFORMS, vol. 66(4), pages 1509-1526, April.
    5. Yanwu Yang & Daniel Zeng & Yinghui Yang & Jie Zhang, 2015. "Optimal Budget Allocation Across Search Advertising Markets," INFORMS Journal on Computing, INFORMS, vol. 27(2), pages 285-300, May.
    6. Baffoe-Bonnie, John, 2004. "Learning-by-doing and input demand of a rate-of-return regulated firm," Economic Modelling, Elsevier, vol. 21(6), pages 1015-1037, December.
    7. Sadek, Biland, 2024. "Components and Strategic Routes of Corporate Transformations," MPRA Paper 120332, University Library of Munich, Germany, revised 26 Feb 2024.
    8. Daniel Reißmann & Daniela Thrän & Alberto Bezama, 2018. "Key Development Factors of Hydrothermal Processes in Germany by 2030: A Fuzzy Logic Analysis," Energies, MDPI, vol. 11(12), pages 1-20, December.
    9. Lee, Kangil & Han, Taek-Whan, 2016. "How vulnerable is the emissions market to transaction costs?: An ABMS Approach," Energy Policy, Elsevier, vol. 90(C), pages 273-286.
    10. Wang, Weijia & Plante, Robert D. & Tang, Jen, 2013. "Minimum cost allocation of quality improvement targets under supplier process disruption," European Journal of Operational Research, Elsevier, vol. 228(2), pages 388-396.
    11. Michael A. Lapré & Amit Shankar Mukherjee & Luk N. Van Wassenhove, 2000. "Behind the Learning Curve: Linking Learning Activities to Waste Reduction," Management Science, INFORMS, vol. 46(5), pages 597-611, May.
    12. Ramirez, R. & Bhatti, Y. & Tapinos, E., 2020. "Exploring how experience and learning curves decrease the time invested in scenario planning interventions," Technological Forecasting and Social Change, Elsevier, vol. 151(C).
    13. Spertino, Filippo & Di Leo, Paolo & Cocina, Valeria, 2013. "Economic analysis of investment in the rooftop photovoltaic systems: A long-term research in the two main markets," Renewable and Sustainable Energy Reviews, Elsevier, vol. 28(C), pages 531-540.
    14. Wojciech Koziol & Anna Mikos, 2020. "The measurement of human capital as an alternative method of job evaluation for purposes of remuneration," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 28(2), pages 589-599, June.
    15. Wang, F. -K. & Lee, W., 2001. "Learning curve analysis in total productive maintenance," Omega, Elsevier, vol. 29(6), pages 491-499, December.
    16. Biskup, Dirk & Simons, Dirk, 2004. "Common due date scheduling with autonomous and induced learning," European Journal of Operational Research, Elsevier, vol. 159(3), pages 606-616, December.
    17. Hong, Sungjun & Chung, Yanghon & Woo, Chungwon, 2015. "Scenario analysis for estimating the learning rate of photovoltaic power generation based on learning curve theory in South Korea," Energy, Elsevier, vol. 79(C), pages 80-89.
    18. Biskup, Dirk, 2008. "A state-of-the-art review on scheduling with learning effects," European Journal of Operational Research, Elsevier, vol. 188(2), pages 315-329, July.
    19. Corsi, Thomas M. & Grimm, Curtis M., 1987. "Mobility Barriers in the Motor Carrier Industry," Journal of the Transportation Research Forum, Transportation Research Forum, vol. 28(1).
    20. Nippa, Michael, 2011. "Zur Notwendigkeit des Corporate Portfolio Management: Eine Würdigung der wissenschaftlichen Forschung der letzten vier Jahrzehnte," Freiberg Working Papers 2011/02, TU Bergakademie Freiberg, Faculty of Economics and Business Administration.

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    Keywords

    planning: corporate;

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