Difference between revisions of "CO"

Revision as of 22:57, 7 February 2023

The cost associated with generating revenue or performing a process; the costs of performing the work. Cost has four dimensions:

• Fixed Costs = Costs that remain the same despite volume of activities performed, or products or services produced or sold. Fixed costs typically require more time, effort and/or risk to add or remove, and behave like stair-step costs
• Variable Costs = Costs that vary proportionally with volume of activities performed, or products or services produced or sold. Variable costs behave linearily
• Economies of Scale = Cost advantages from increase of overall volumes
• Economies of Scope = Cost advantages from increase of scope of operations; Consider shared services

The following metrics have been identified as strategic and diagnostic metrics for Cost:

</table> Compare also to other performance Attributes: Adaptability, Asset Efficiency, Dependability, Responsiveness, Sustainability.

Notes

Aggregation of costs may result in Mixed Costs = Costs that behave partially like fixed costs and partially like variable costs.

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