Dynamic costs and revenues analysis: A new tool for the strategic production management

The execution of a project and/or the production of small lots of goods present some particular features with respect to the more diffused mass production. In particular, in these two cases the output’s level is constant and cannot be changed. In these situations, therefore, the theoretical framework of the traditional break-even point analysis results are inadequate for good planning and management of the company’s productive strategy. This is due mainly to the fact that it is the time of execution rather than the output’s level by which the real and fundamental key-variable on which the managers of a company working by projects operate, while the output’s level represents a constraint to be respected. The purpose of this paper consists of a critical examination of the traditional analysis of the break-even point in order to show the serious weakness of this tool when applied to the field of the production by project.