Chapter 5 Capacity Planning

Section 5.1 Crossover Chart

Example 5.1 Rustan's Supermarket

Table 5.1 Data Summary

ERP Cost ($) Units (in Modules)

System Total Fixed Per Module Minimum Maximum
Oracle 220,000 32
SAP 150,000 55 0 9,600
Dynamics 340,000 15

Table 5.2 Total Cost

ERP Cost ($) Minimum Maximum

System Total Fixed Per Module Modules Total Cost ($) Modules Total Cost ($)
Oracle 220,000 32 0 220,000 9,600 527,200
SAP 150,000 55 0 150,000 9,600 678,000
Dynamics 340,000 15 0 340,000 9,600 484,000

Figure 5.1 Crossover Chart

Crossover Chart
800,000

700,000

600,000

500,000
Total Cost $

400,000

300,000

200,000

100,000

0
Oracle SAP Dynamics

Table 5.3 Lowest Cost Interval

 ERP From To
System Modules Total Cost ($) Modules Total Cost ($)
SAP 0 150,000 3,043 317,391
Oracle 3,043 317,391 7,059 445,882
Dynamics 7,059 445,882 9,600 484,000
Section 5.2 Single-Product Breakeven Analysis

Example 5.2 Purefoods Corned Beef

Table 5.4 Data Summary

Units (in Cases)

Item Value
Minimum Maximum
Fixed cost/month ($) 7,159
Direct labor/unit ($) 1.31
0 9,500
Material cost/unit ($) 1.05
Selling price/unit ($) 3.87

Table 5.5 Marginal Profit

Item Value
Fixed cost/month ($) 7,159
Variable cost/unit ($) 2.36
Selling price/unit ($) 3.87
Profit/unit ($) 1.51

Table 5.6 End Points

Minimum Maximum
Item
Units Amount ($) Units Amount ($)
Total sales ($) 0 0 9,500 36,765
Total cost ($) 0 7,159 9,500 29,579
Total profit ($) 0 -7,159 9,500 7,186

Figure 5.2 Breakeven Analysis

Breakeven Chart
40,000
35,000
30,000
25,000
Total Amount ($)

20,000 Total Sales

15,000 Total Cost
Total Profit
10,000
5,000
0
-5,000
-10,000
Units (in cases)
 -5,000
-10,000
Units (in cases)

Table 5.7 Breakeven Point

Item Value
Breakeven Point (units) 4,741
Breakeven Point ($) 18,348
Section 5.3 Multiproduct Breakeven Analysis

Example 5.3 Jollibee Fastfood

Table 5.8 Data Summary

Price per Cost per Forecast

Item
Unit ($) Unit ($) (units)
Chicken Joy 2.85 1.40 2,130
Cheese burger 1.75 0.95 3,500
French Fries 0.85 0.40 2,500
Pineapple juice 0.60 0.25 3,050
Tuna pie 1.30 0.70 1,500
Fixed cost/month ($) 2,850

Table 5.9 Weighted Contribution

Price per Cost per Forecasted Share of Weighted

Item V/P 1-V/P
Unit P Unit V Sales ($) Sales Contrib'n
Chicken Joy 2.85 1.40 0.49 0.51 6070.5 0.3353775 0.1706306
Cheese burger 1.75 0.95 0.54 0.46 6125 0.3383884 0.1546919
French Fries 0.85 0.40 0.47 0.53 2125 0.1174001 0.062153
Pineapple juice 0.60 0.25 0.42 0.58 1830 0.1011022 0.0589763
Tuna pie 1.30 0.70 0.54 0.46 1950 0.1077318 0.0497224
Total 18100.5 1 0.4961741

Table 5.10 Breakeven Points

Units per Amount/

Item
month month ($)
Break-even point (total) 5743.9511
Chicken Joy 676 1926.3918
Cheese burger 1,111 1943.6867
French Fries 793 674.34027
Pineapple juice 968 580.72598
Tuna pie 476 618.80637
Total ($) 5,744