Part FIVE: PRESENT ECONOMY
This part introduces break-even and optimization analysis. These two forms of decision analysis are referred to as “present economy” because they don't involve the time value of money (i.e., future economy). In break-even and optimization analyses, the choice being made is represented in terms of one or more decision variables and one or more objective functions. Break-even analysis finds values of the decision variable where performance is identical between alternatives and is explained in Chapter 19. Optimization analysis finds the value of the decision variable(s) with the best overall performance and is described in Chapter 20.
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