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Operations Management: Sustainability and Supply Chain Management, Twelfth Edition
book

Operations Management: Sustainability and Supply Chain Management, Twelfth Edition

by Jay Heizer, Barry Render, Chuck Munson
February 2016
Intermediate to advanced content levelIntermediate to advanced
480 pages
219h 58m
English
Pearson
Content preview from Operations Management: Sustainability and Supply Chain Management, Twelfth Edition

Break-Even Analysis

Break-even analysis is the critical tool for determining the capacity a facility must have to achieve profitability. The objective of break-even analysis is to find the point, in dollars and units, at which costs equal revenue. This point is the break-even point. Firms must operate above this level to achieve profitability. As shown in Figure S7.5, break-even analysis requires an estimation of fixed costs, variable costs, and revenue.

Fixed costs are costs that continue even if no units are produced. Examples include depreciation, taxes, debt, and mortgage payments. Variable costs are those that vary with the volume ...

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Publisher Resources

ISBN: 9780134422404