Practical business application of break even analysis in graduate construction education

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The recent trends in the competitive global market dictate that construction management students must manage at higher levels of sophistication. This is especially important at the graduate level where the focus of education is on "management". One potential discipline, which can aid in producing more sophisticated managers, is economics. However, many of the economic tools are unfamiliar to the construction graduate because agriculture and business disciplines traditionally dominate economic analysis. As a result, construction students who enroll in economics courses are taught agricultural or business terms with no application being germane to construction. In an attempted to supplement the traditional disciplines, this paper will examine and demonstrate one of the typical economic analytical tools, Break-even Analysis, in a construction business context. This is to provide the graduate educator with a teaching tool that can be used to assist future construction professionals in the nuances of operating a construction business. Included are the theoretical underpinnings of break-even analysis and a hypothetical case study, which applies this economic concept to the business operations of road construction firm.

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Journal of Construction Education

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