Title
Operations Management - Break Even : Example - PotteryCreator
Bonnie Simmons and Memorial University. Centre for Innovation in Teaching and Learning (CITL)Description
Video demonstrating the solution to a series of break even questions about the following situation:
A producer of pottery is considering the addition of a new factory to absorb the backlog of demand that now exists. The primary location being considered will have fixed costs of $10,000 per month and variable costs of $1 per unit produced. Each item is sold to retailers at a price that averages $2.
Question a: What quantity per month is required in order to break even?
Question b: What profit would be realized on a monthly quantity of 20,000 units?
Question c: What quantity is needed to obtain a profit of $16,000 per month?
Question d: What quantity is needed to provide revenue of $23,000 per month?
Question e: Plot the total cost and total revenue lines against quantity per month.
Learning Design
Describe the break-even analysis approach for evaluating capacity alternatives and use it to solve problems.Date Created
2017Format
Video/mp4Duration
10:59 minutes/seconds