Question

Stella Inc. has recently introduced a new production method that will make the production of their medical devices more cost-effective. Which of the following will most likely be the result of this innovation? Jumps to a steeper learning curve. destabilizes a steeper learning curve. moves down the existing learning curve moves up the existing learning curve.

Answer 1

Answer:

The result of introducing a cost effective innovation is a jump to a steeper existing learning curve.

Explanation:

Learning curve is a Graphical representation of the common sense principle that the more one does something the better one gets at it.

Learning curve shows the rate of improvement in performing a task as a function of time, or the rate of change in average cost (in hours or dollars) as a function of cumulative output.

A steep learning curve is a good thing. If productivity increases due to cost effectiveness, the learning curve will become steep.

Answer 2

Answer:

Moves Down the Existing Learning Curve.

Explanation:

With the introduction of a new production method, learning will become slower initially and gradually increase over time when employees become better acquainted with it. This falls under increasing returns learning curve.