Chapter 19. Break-Even Analysis
Suppose you are trying to choose between two different suppliers to produce copies of a CD for a commercial software product your company is releasing. One of the suppliers offers a lower initial setup charge but costs more per copy, whereas the other supplier offers a higher initial setup charge with a lower per-copy cost. The decision of supplier will probably be based on the number of copies needed. If only a few copies are needed, the first supplier would be cheaper. If many copies are needed, however, the second supplier would be cheaper. Break-even analysis is a way of choosing between two or more alternatives by figuring out which points, if any, would be indifferent between those alternatives. Below the ...
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