Cost

• Overall


  the minimisation of expenses such that operations processes are conducted in a cost-effective and efficient manner

  Often the costs incurred to produce a product will determine the price. Overtime a business will seek to become more efficient and reduce cost

  This can be achieved by: new technology to lower costs, use inputs better and minimise waste

  This can be achieved by reducing supplier costs and manage inventory
• Purpose and +strategy


  Purpose: to achieve cost leadership

  How to achieve it? - by sourcing inputs from lower cost suppliers, make better use of technology to get the most out of inputs and minimise waste using lean production and reduce post production costs → hire cheaper distributors or manage quality during production through safe packaging (less warranty costs)