Summary
Break-even analysis is a method for choosing between two or more alternatives by figuring out which points, if any, would be indifferent between those alternatives. This chapter covered the following major points:
A decision variable represents a set of possible values for some choice in a given decision analysis.
An objective function is an equation that relates the values of the decision variable(s) to the performance of an alternative.
An objective function that relates values of decision variables to income (e.g., income as a function of units sold) is called an income function, whereas a function that relates values to cost is called a cost function.
To solve a break-even problem for two alternatives, set their objective functions equal ...
Get Return on Software: Maximizing the Return on Your Software Investment now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
