Break-even volume

The cost factors which determine the method of manufacture for any particular model are subject to specific local considerations, but there will always be a break even volume below which the necessary investment in presses and press tools for a steel bodied vehicle is unjustified. It is below this qualifying level, which could be as low as 5000, or as high as 100000, that some kind of chassis and space frame construction can be more cost effective than a unitized steel structure. Nowadays, opting for a space frame is likely to be followed by opting, at least in part, for plastic body panels. 

Table 20.9 Initial cost and volume installed versus learning rate, break even volume and learning investment...

The related argument here is that of break-even time rather than the break-even volumes discussed in Chapter 3. Traditional break-even analysis focuses on the volume of product needed to be moved before the investment pays off. Given shortening times-to-market and compressed product life cycles (e.g. from 6 months to 45 days of shelf-life for Nike footwear) the analysis shifts towards the question how long before break-even is reached Figure 5.1 illustrates the point. 

High temperature is an important requirement for the attainment of fusion reactions in a plasma. The conditions necessary for extracting as much energy from the plasma as went into it is the Lawson criterion, which states that the product of the ion density and the confinement or reaction time must exceed 10 s/cm in the most favorable cases (173). If the coUisions are sufficiently violent, the Lawson criterion specifies how many of them must occur to break even. Conventional magnetic confinement involves fields of as much as 10 T (10 G) with large (1 m ) plasmas of low densities (<10 particles/cm ) and volumes and reaction times of about 1 s. If the magnetic flux can be compressed to values above 100 T (10 G), then a few cm ... 

The two most common designs of break-even charts are shown in Figures 61.9 and 61.10. In both cases the y (vertical) axis is used for sales (output) and costs while the X (horizontal) axis is used for volumes, capacity or time. 

To investigate spontaneous symmetry breaking, one ordinarily has to start at finite volume and insert a source which explicitly breaks the symmetry. The source is removed only after the infinite volume limit is taken. We stress that the source does not have to be a quark mass (it could be a higher dimension operator), so one can investigate symmetry breaking even when the quark mass is exactly zero throughout the calculation. (To be precise, a quark mass does not explicitly violate vector symmetries, so it cannot play the role of the source in the thermodynamic limit needed here.)... 

D. Break-even analysis sales volume needed to cover fixed and variable costs... 

Break-even, the market size size needed for revenues to cover ongoing fixed costs, is not the same as the payback period, the time required for cash flow to cover an investment. Break-even deals with steady state issues and is measured in either units of money or product volume payback period deals with the cash flow transient and is measured in units of time. 

A squeeze of this nature pushes up the break-even rate of operation, and sets into motion a vicious cycle. Any individual operator can usually show that his profits will be higher if he can operate near capacity even if he obtains the added volume by reducing his prices. Somewhat paradoxically, it is sometimes the most inefficient operator who feels the greatest pressure to gain this additional volume, because his break-even rate of operation is so high as compared with the more efficient producer. 

Strip packs present an alternative form of pack for a unit dosage. Strips can be produced from single or multi-ply materials, provided the two inner plies can be sealed by heat or pressure (e.g. cold self-adhesive seal). Materials can range from relatively permeable plies to those which incorporate a foil ply of sufficient thickness (and effectiveness of seal) that an individual hermetic seal is produced for each dosage. To date strip packs are usually produced at lower speeds and also occupy greater volume than blisters. The break-even cost with glass containers largely depends on the material used, output speed, and item size. 

Strip packs incorporating a suitable foil ply offer excellent protection and are superior to all reclosable packs (there are no risks associated with opening and reclosure) and conventional blister packs. In general strips are produced at lower speeds than blisters, occupy a greater volume, and are more expensive. Cellulose or OPP films (single ply) are likely to break even... 

Often to analyze the impact of decisions, companies calculate the break-even point to produce a product. The break-even point is the production level where the volume of sales pays both the fixed costs and the variable costs of producing that product. If the total revenue and total costs were graphed, the breakeven point is where these two lines intersect. Of course this intersection is where the number of sales (i.e., total sales revenue) equals the total expenses. 

Break-even point—The level of production or the volume of sales at which operations are neither profitable nor unprofitable. The breakeven point is the intersection of the total revenue and total cost curves. 

Rearranging this equation to find the number of units or volume that need to be sold to break even we have ... 

When creating this break-even chart you first create the horizontal and vertical axes. The volume of unit sales always goes on the horizontal or x axis. The revenue or dollars always go on the vertical or y axis. Next you graph the fixed costs onto the chart. The fixed costs are a straight line, which is always parallel to the horizontal or x axis. In Figure 3.1 the fixed costs are 50,000 and are shown as a dashed line. Once the fixed costs are graphed, you then graph the... 

This analysis demonstrates the relationship between fixed costs, variable costs, and revenue. For each product, there is a variable cost, and when deducted from the sales value, this generates a contribution. The volume level of sales at which the sum of unit product contribution equals the fixed and variable costs constitutes the break-even point. Construction of the appropriate chart (Figure 2.1) enables management to identify which expenses are controllable, which cost items contribute most to total expenditure, and how much these might possibly be reduced. Care must be taken in the allocation of fixed costs. Some that were previously considered fixed could be made variable by adopting techniques such as re-engineering and activity-based costing. 

The break-even and profit/volume charts are too simplistic - they don t pay attention to individual products, and they assume that any change in one product will have an identically proportionate effect on the others... 

Expenses fall into two major categories fixed and variable. Fixed expenses are those that remain the same, irrespective of production or sales volume. They are called overhead and represent a special concern to management. These are the expenses that must be covered, in good times and bad, and they determine the break-even point of the company. Thus all good managers are expected to work to control, and if possible, reduce, all the elements that enter into overhead. 

In principle the operator s demand for low procurement costs, i.e. low investment costs for the designed plant is logical. The lower the investment volume the quicker the break even point is reached. However, this demand must not result in the plant being built as cheap as possible. Quality and thus hfespan of a finished plant diminish with decreasing procurement costs. Other costs, however, increase, such as repair and maintenance costs as well as labour costs, since low quality inevitably leads to more frequent failures and breakdowns which entail higher labour costs and related costs for the procurement of spare parts. 

If we add the variable costs to the fixed costs against a given range of volume (so that the fixed costs remain completely fixed), and add in the sales revenue (which also increases in line with volume), we arrive at the break-even chart shown in Figure 3.5 overleaf. The sloping line that starts at O is the sales revenue. The total cost line starts at F, and represents the sum of fixed and variable costs. The point at which the sales revenue line crosses the total cost line is the breakeven point. Below this point, a loss will be incurred above it a profit will be made. A helpful concept in evaluating break-even charts is that of contribution ... 

Chart A shows a situation with high variable costs and low fixed costs. In chart B, the situation is reversed. The break-even point has moved well to the right that is, chart B requires a higher volume to break even than A. This is because a much higher volume of sales is needed to cover the high level of hxed costs. 

Alternately, break-even analysis can be used as a make or buy and as a supplier comparison tool. Businesses need to determine whether or not to outsource manufacturing or other business processes based on production and facility capacity requirements. Break-even analysis can be useful in these decisions. In these types of scenarios, fixed and variable costs and expected production volumes are the focuses, not necessarily the price per unit. Break-even analysis is referred to as cost-volume analysis in such cases. 

The fluid is formulated from a premium mineral od-base stock that is blended with the required additive to provide antiwear, mst and corrosion resistance, oxidation stabdity, and resistance to bacteria or fungus. The formulated base stock is then emulsified with ca 40% water by volume to the desired viscosity. Unlike od-in-water emulsions the viscosity of this type of fluid is dependent on both the water content, the viscosity of the od, and the type of emulsifier utilized. If the water content of the invert emulsion decreases as a result of evaporation, the viscosity decreases likewise, an increase in water content causes an increase in the apparent viscosity of the invert emulsion at water contents near 50% by volume the fluid may become a viscous gel. A hydrauHc system using a water-in-od emulsion should be kept above the freezing point of water if the water phase does not contain an antifreeze. Even if freezing does not occur at low temperatures, the emulsion may thicken, or break apart with subsequent dysfunction of the hydrauHc system. 

Corrosion usually results in a leak or failure of a support because a vessel or support gets too thin. It is then not strong enough to withstand the pressure or load. However, rust can cause failure in another way. It occupies about seven times the volume of the steel from which it was formed. V/hen rust occurs between two plates that have been bolted or riveted together, a high pressure develops. This can force the plates apart or even break the bolts or rivets (see Section 9.1.2 g). Corrosion of the reinforcement bars in concrete can cause the concrete to crack and break away. 

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