Effect of Learning and Forgetting on Batch Sizes

This paper investigates the effect of learning and forgetting on production scheduling decisions. Numerous papers have appeared on this topic in the last four decades; they show that firms are better off producing in larger batches in the presence of learning and forgetting. However, these papers fail to consider one or more of realistic features of learning and forgetting; factors such as (1) the amount forgotten increases with break length between two batches and (2) the forgetting could be slow over an initial short interval followed by fast forgetting. Our paper contributes by demonstrating that a consideration of these realistic features leads to a different conclusion—firms may be better off producing in smaller batches in the presence of learning and forgetting. This is a new insight that provides one more justification for producing in small batches.