Productivity analyzed in terms of a breakeven analysis Custom Essay

[pewslideshow slidename=anim2]

Learning Wizard

Productivity can be analyzed in terms of a breakeven analysis. But there are two general ways to consider Breakeven. The first way is based on a product and its price, costs, and volumes, which is a special case of Cost-Volume-Profit analysis. This method utilizes the profit equation:

Profit = Price * Volume ? Variable Costs * Volume ? Fixed Costs.

Note that Price and Variable Costs are both on a per unit basis. To determine the breakeven point, profit is set equal to zero, and the equation is solved for Volume.

BE = (Fixed Costs) / (Price ? Variable Costs)

The second method of doing breakeven analysis is to compare alternatives that have Fixed Costs and Variable costs and determine the volume at which these total costs for each is equal to zero.

Fixed Costs[a] + Variable Costs[a] * Volume = Fixed Costs[b] + Variable Costs[b] * Volume

Note that Variable Costs are on a per unit basis. Solving for the BE volume:

BE = (Fixed Costs[a] – Fixed Costs[b]) / (Variable Costs[b] – Variable Costs[a])

Download this PowerPoint that provides more details and examples. [BreakevenPPT]

After reviewing the examples in the PowerPoint, download this Excel file that has the examples along with the exercises for you practice. [BreakevenCalc]. You can use this Excel Breakeven Calculator for the Case 5 problem.

Once you have mastered these examples and exercises you should be ready to analyze the EBBD situation and develop a solution.

Module 5 – Case

Virtual World

To: You

From: Danny Wilco

Subject: loading dock area decision

As I indicated, I have the information you need to analyze the loading dock decision. We have obtained quotes from different companies for the two possibilities. The information from these quotes is summarized in this Word doc [QuotesSummaryInfo]. You will find the investment costs for each option and an estimate of the service (unloading) times for each one.

The first option is for an automated conveyor system that can be extended into the back of a delivery truck. The products are place directly on the conveyor and moved into the warehouse. This will be a single server situation, but should considerably speed up the process. However, note that there are operating and maintenance costs for this piece of equipment.

The second option is to make construction changes to the dock and expand it so that there is room for two unloading stations. We expect that we will continue to use the current unloading process, but this will provide the two-server option.

Analyze this data and determine which option is the best for EBBD. Consider two scenarios, one with no increase in deliveries (flat sales) from our vendors, and the other with a 3% annual growth, which will increase the number of possible daily vendor deliveries. As a reminder, we still consider the current average daily vendor deliveries to be at 28 per day.

We are looking for a clear and concise report that provides your conclusions and recommendations with a good explanation.

Let me know if you have any questions.

Learning Wizard

Use what you have learned from the Background section. Develop the costs equations for each option and determine the breakeven point for the options. Use the current delivery situation and the forecast to determine which options are best. Write a clear report that provides what Wilco is looking for. Include explanation of your calculations.

TIP: The use of Breakeven Analysis is straightforward. What is tricky in this problem is determining the Fixed Costs and Variable Costs. For the variable costs, you need to determine the unloading time for each alternative and apply the labor cost/hr. And make sure you include all of the variable costs for each alternative. The fixed costs should include all annual fixed costs. Remember that you are looking at the time period of a year so that you can determine the annual breakeven quantity.

Expectations of the written report

The report should thoroughly address these aspects in depth and breadth:

Problem situation: clearly elucidate the problem situation at EBBD
Assumptions: what are the assumptions that need to be made and your critical evaluation
Solution: discuss how you developed the Solver solution. Keep in mind that your audience is not too technical and do not need a lot of detail on this.
Make sure you attach the Excel file.
You should refer to the Excel file when necessary.
Recommendations: what do you propose for EBBD in terms of using this method in the future and for the other product lines?
Justification & Explanation: clear reasoning as to why the recommendations were made
Writing style & Organization: well-formed sentences and paragraphs, well organized with flow of reason, and good use of language that pertain to concepts and terminology
Use of references & citations: References are NOT REQUIRED. If you do use any, be sure to include appropriate use of citations in the paper and reference list.

Place an order of a custom essay for this assignment with us now. You are guaranteed; a custom premium paper being delivered within its deadline, personalized customer support and communication with your writer through out the order preparation period.

[pewslideshow slidename=anim3]

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more