F3 Analysis of Break-Even Charts
Benefits and Limitations of Break Even Analysis
Benefits
Quick and easy calculations
Charts are easy to interpret
Gives a production target
Can be used to estimate resource requirements
Can easily assess whether the production of a product is viable
Limitations
Assumes all products are sold
Assumes all lines are linear
Does not account for multiple products
Static model in a dynamic environment
Ignores factors other than cost and revenue
GIGO