Base Comparison and Break-Even

Break-Even Demand

Break-even demand is where the make and buy totals match.

highlighted = computed this step

Break-Even

Break-even demand is 200/3.

break-even demand=200/3\text{break-even demand}=200/3
Make-or-buy comparisonThe chart displays exact base totals and break-even demand.base comparisonmake 500; buy 600; winner makemeasurevaluemeaningdemand100unitsfixed cost200make optionvariable cost3per unitbuy price6per unitbreak-even demand200/3make equals buymakemake 500buybuy 600what-if makewhat-if make 350what-if buywhat-if buy 300base winner make by 100; what-if winner buy by 50

Meaning

At break-even demand, make total and buy total are equal.

make total=buy total\text{make total}=\text{buy total}
Make-or-buy comparisonThe chart displays exact base totals and break-even demand.base comparisonmake 500; buy 600; winner makemeasurevaluemeaningdemand100unitsfixed cost200make optionvariable cost3per unitbuy price6per unitbreak-even demand200/3make equals buymakemake 500buybuy 600what-if makewhat-if make 350what-if buywhat-if buy 300base winner make by 100; what-if winner buy by 50