Title :
Multi-product Dynamic Break-even Analysis and Its Application
Author :
Guang-Bin, Liu ; Bin-li, SUN
Author_Institution :
Beijing Inst. of Petrochem. Technol., Beijing
Abstract :
Based on analyzing the defects and drawbacks existed in applying the traditional break-even analysis method to long-term investment project decisions, this article holds up an idea that the time value of money must be considered for any break-even analysis on long-term investment projects, builds a mathematical model for dynamic break-even analysis considering the time value of money at the time of multi-product production, and analyzes its application in multi-product production by way of example. It arrives at a conclusion that at the static break-even point, a project may have potential losses, but the dynamic break-even point means that the project will get exactly the basis profit, and is real "break-even". Being operable, objective and practical, the mathematical model built for multi-product dynamic break-even analysis can improve the scientificity and dependability of project investment decisions.
Keywords :
investment; long-term investment project decisions; multi-product dynamic break-even analysis; multi-product production; Conference management; Engineering management; Financial management; Investments; Marketing and sales; Mathematical model; Production; Project management; Risk analysis; Technology management; break-even analysis; dynamic break-even point; net present value; time value of money;
Conference_Titel :
Management Science and Engineering, 2007. ICMSE 2007. International Conference on
Conference_Location :
Harbin
Print_ISBN :
978-7-88358-080-5
Electronic_ISBN :
978-7-88358-080-5
DOI :
10.1109/ICMSE.2007.4422160