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:
Compare also to other performance Attributes: Adaptability, Asset Efficiency, Dependability, Responsiveness, Sustainability.
Aggregation of costs may result in Mixed Costs = Costs that behave partially like fixed costs and partially like variable costs.
Community Importance Rating
|CO1||Supply Chain Costs||1||CO1|
|CO2||Customer Acquisition Costs||1||CO2|