Break-even Analysis with Learning Effect under Inflation

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Break-even analysis is a simple and useful tool in decisions and planning activities though its use is somewhat limited to short-term analysis. The subject is discussed in the fields of engineering economics, production management, cost and managerial accounting, finance, marketing, and so on. Conventional break-even analysis suits the case of stable price and low interest rate. In this paper, we try to overcome the limit by considering following factors, namely, time value of money, depreciation, tax, and capital gains. Also, considering learning effect, we increase applicability to a new project which raises certain changes such as a replacement of production process, an employee turnover, etc. Thus, we suggest a model which has a dynamic break-even quantity per period for the project. Furthermore, we examine the effect of inflation in break-even analysis.
Publisher
대한산업공학회
Issue Date
1988-06
Language
English
Citation

대한산업공학회지, v.14, no.1, pp.91 - 101

ISSN
1225-0988
URI
http://hdl.handle.net/10203/57147
Appears in Collection
MT-Journal Papers(저널논문)
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