I received a call to assist someone with some assignment on Break-even Analysis and Sensitivity Analysis. I just remembered this topics I had encountered them 4 or 5 years back when I was doing my undergraduate degree. I think the course name was either Decision Support Systems or Operations Research or both. Since I engage financial arithmetics when colleagues and friends seek programming solutions for their assignments (sometimes someone brought to me the Black Scholes method to optimise some solution, I could see the disappointment on his face when I told him I had never heard of Black Scholes models), I had to take it on. Luckily it was some of those very straightforward things that I could find easily after doing a very simple web search. The next minute, I was the sage in financial accounts taking someone through profit and loss calculations, break-even analysis and so much more.
However, the focus of this blog is not more on the solution, but the media used to offer the solution. We were using an Instant Messenger (IM) to communicate (for the friend was in Kenya and am more than 3000 km away). It was interesting how for example I had to minimise the formula to fit the situation. Here is a snippet of the IM chat with permission from the anonymous friend. It has breaks where I put on comments to show the advantage and disadvantages of the chat as a teaching and learning tool.
(13:29:25) Anonymous: i am in the middle of calculating break even analysis, please assistFrom the above, the chat can be used to support and enhance teaching and learning. However, it is not possible for one to simultaneously offer support to more than a given minimum number of students. Also, its archival is sometimes limited as it is too personal to be opened up to the rest as Frequently Asked Questions (FAQs) that those who might be having the same problem can refer to.
(13:30:06) James: break even analysis....
(13:30:21) James: I came across it in decision support system in my undergrad
(13:31:27) Anonymous: it is a team case study and have got to contribute....
(13:31:42) James: is it online?
(13:31:55) Anonymous: yes
(13:32:10) James: whats the url?
(13:32:43) Anonymous: let me attach it here, coz you'll need authority to login
(13:32:51) James: ok....
(Anonymous tries the inbult IM file sending option that does not work for us. A chat is only useful for text-based communication, and mainly when the text is not extending more than a couple of lines)
(13:41:00) Anonymous: did u receive my attachment?
(13:41:24) James: let me check
(13:41:35) James: no
(13:41:47) James: send it to my email
(13:46:16) Anonymous: whats ur address
(13:46:29) James: myemailaddress
(13:47:37) Anonymous: ok, thankks
(13:47:46) Anonymous: when do u respond to it?
(13:48:07) James: we can discuss
(13:48:15) James: if you will be online
(I believe in showing people how to fish, not to give them fish. I was alse learning, and I needed to learn together with Anonymous)
(13:48:21) James: I got it now
(13:48:23) Anonymous: when
(13:54:46) Anonymous: do we discuss now or later?
(13:55:01) James: lets go through it
(13:55:17) James: do you know the calculation of the first bit?
(The assignment had eight sections. The first one was straightforward. I also wanted to know where Anony got stuck)
(13:55:33) Anonymous: yes
(13:55:48) James: second?
(13:56:06) Anonymous: no
(I know now. I offer the formula)
(13:56:17) James: for that the formula is
(13:56:22) Anonymous: calculating break even analysis
(13:56:49) James: Break even= Fixed Cost/(unit price - variable unit cost)
(13:57:01) James: simply put
(13:57:29) James: Q=Fc/(Up-Vc)
(13:57:56) Anonymous: i'll work out later
(13:58:00) Anonymous: next
(14:00:41) James: a minute
(I receive a call from a friend and have to answer it, I need to inform Anony to hold for me. With the formula Anony can be able to proceed with the calculations)
(14:07:13) James: AC=Total Cost/# of units
(14:09:10) James: Fourth
(14:10:25) James: you can use the formular for one with 150,000 units
(14:10:53) James: derived from if 40%=60 000, 100%=?
(14:11:06) James: got it?
(14:11:37) Anonymous: yes
(14:12:09) James: for four, adjust the Vc=150 000*30
(14:13:16) James: six follows the same formula
(14:13:23) James: but with 120 000 units
(14:13:56) James: ditto to seven
(14:14:04) Anonymous: ok
(14:14:13) James: and the rest are discussions
(14:14:23) Anonymous: thanks a million
(14:14:29) James: Do you see the whole picture now?
(14:14:49) Anonymous: i'll workout the rest iin the evining, i owe you one
(14:15:55) Anonymous: u going out for a drink?
(14:16:18) carice2: am not drinking this weekend
(Anony now comfortable and happy with the help so far)
(14:16:56) James: let me forward you a powerpoint ppt that I have downloaded from the net, and check out if it is helpful