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Cost

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


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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Hierarchy

IDNameLevelx
COCost0CO
CO1Supply Chain Costs1CO1
Cost 40000 0 Performance, Attribute, Metric, Cost, Expense, COGS, Distribution Cost The cost associated with generating revenue or performing a process; the costs of performing the work