There are limitations to the use of learning curves, and care must be taken to avoid erroneous conclusions. Typical limitations include:

• The learning curve does not continue forever. The percentage decline in hours/ dollars diminishes over time.

• The learning curve knowledge gained on one product may not be extendable to other products unless there exist shared experiences.

• Cost data may not be readily available in order to construct a meaningful learning curve. Other problems can occur if overhead costs are included with the direct labor cost, or if the accounting codes cannot separate work packages sufficiently in order to identify those elements that truly demonstrate experience effects.

• Quantity discounts can distort the costs and the perceived benefits of learning curves.

• Inflation must be expressed in constant dollars. Otherwise, the gains realized from experience may be neutralized.

• Learning curves are most useful on long-term horizons (i.e., years). On short-term horizons, benefits perceived may not be the result of learning curves.

• External influences, such as limitations on materials, patents, or even government regulations, can restrict the benefits of learning curves.

• Constant annual production (i.e., no growth) may have a limiting experience effect after a few years.