Many of the capacity decision models we have shown in this chapter can easily be incorporated into a spreadsheet application, such as Microsoft Excel. The following spreadsheet calculates the break-even points and indifference points for three capacity alternatives.

For instance, the break-even point for option B (cell C14)

is calculated as follows:

BEP fixed cost/(revenue per unit - variable cost per unit)

Likewise, the indifference point for options B and C (cell E15) is:

Of course, the key advantage of using the spreadsheet is that we can quickly evaluate new scenarios simply by changing the input values.

Transcribed Image Text:

C8/(D4 D8) 14.71