Peer Review

The quality of most of the content in this simulation is high, with the exception of the concern noted below. Definitions for terms in the glossary as well as information contained in the reference materials are accurate. The module demonstrates core concepts grounded in the discipline, and they are integrated very well. The simulation is flexible in that it can be used in several situations: as a class demonstration, for individual homework or group project and is suitable for both on-campus and online courses. The amount of material included is adequate, and the module is satisfactorily self-contained when the proper context is established such that a student can learn much in a short time.

The module seems to be mixing apples and oranges in terms of its purpose, i.e., making acceptable marketing and production decisions such that break-even occurs within 2 years. In order for this simulation to teach correct concepts, students need to find a solution where demand for the product is <= plant capacity and the break even volume <= to both demand and plant capacity. Many scenarios are judged acceptable by the CEO, Vice President of Marketing, and Vice President of Production, yet some make no sense from a financial standpoint. The fact that fixed costs recur every year appears to be ignored. The purpose of break-even analysis is to determine the sales needed to cover fixed costs in one particular year. Computations generated by the program for break even volume and break even revenue did not match those calculated manually. The break-even formula given in the reference materials states that (price * volume) = (variable costs * volume) + fixed costs. When numbers generated by the simulation are plugged into this formula both sides of the equation do not equal.

Framed within the proper context (see concern below), this simulation could be an extremely useful experiential learning too. Students can see, in real time, the impact of chosen alternatives on the break even point mathematically and graphically. The simulation overview identifies learning objectives and provides the storyline for the simulation.

In order for this simulation to teach correct concepts, students need to find a solution where demand for the product is <= plant capacity and the break even volume <= to both demand and plant capacity. Students need to be warned that just because the CEO, and two VP's have no problem with parameters chosen does not mean the solution generated will make sense logically. It may take many iterations before one arrives at a best decision and as a result the simulation may be somewhat inefficient. It is also unclear whether some of the costs are fixed or variable. Having more background and guidance on the potential impact of marketing investment, outsourcing and automation would be helpful. Feedback appears to be omitted to let users know if cost elements have been correctly categorized as fixed or variable. Finally better feedback also should be provided on the next step to take to solve the problem.

Developed with KDCalc simulation logic, the design of this Break Even Analysis demo is of extraordinarily high quality. Both video and voice have been integrated. Instructions are clear. It is very engaging and interactive and relatively straight forward to use. Scenarios can be saved via screen capture (press Print Screen key) and pasted into a Word document.

The simulation appears to be better suited for users who have high speed broadband access. While the introduction did load in a reasonable amount of time from low speed dial up access (56.6Kbps modem), after waiting 20 minutes, the simulation continued to display the "loading" logo. Also, the placement of various links (instructions and resources) could be improved.