Answer
A learning curve is a concept that shows how labor-hours per unit decrease as production increases, reflecting the learning and improvement of workers. There are two models to incorporate learning into cost estimation:
1. Cumulative Average-Time Learning Model: In this model, the time per unit decreases by a constant percentage each time the cumulative quantity of units produced doubles. It's a cumulative measure of learning.
2. Incremental Unit-Time Learning Model: This model focuses on the incremental time needed to produce the last unit, and it also decreases by a constant percentage as production doubles. It's a more specific measure of the learning effect on the latest units produced.
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