Cost Drivers
The concept of cost drivers can be defined in the consumption or expenditure of recourse or the limitations incurred on revenues. They include:
i. Price
- Amount actually paid
- Price protection
ii. System & Processes:
- Time
- Overhead
iii. Inventory
- Carrying costs
- Overstock & dead stock
- Handling costs
iv. Requirements
- Over-engineered
- Under-engineered
v. Operations
- Maintenance costs
- Operating efficiency
vi. Revenues
- Downtime
- Improved output
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