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Production cost refers to the total expenses incurred in the manufacturing of goods or services, including materials, labor, and overhead. Understanding production costs is essential for evaluating profitability and pricing strategies, as they directly impact the financial health of a business.
Definition. Cost reduction refers to the process of decreasing expenses associated with producing goods or services while maintaining or improving quality. It is a crucial strategy in business that enables companies to enhance profitability, remain competitive, and invest in innovation.
The general goal of a cost reduction effort is to lower the cost to make a product without compromising its performance, reliability, or manufacturing yield. For example, a weld joint made between components purchased from a new, lower-cost supplier should be formed as easily as a weld joint made between components from the previous supplier ...
Cost reduction is the achievement of real and permanent reduction in unit cost of products manufactured. It therefore continuously attempts to achieve genuine savings in cost of production, distribution, selling and administration.
Definition. Cost reduction refers to the strategic approach of decreasing expenses in order to improve profitability while maintaining product quality and service levels. This concept is essential in enhancing operational efficiency and is often achieved through methods like process reengineering, which can streamline workflows and eliminate waste.
8 Οκτ 2024 · economy of scale, in economics, the relationship between the size of a plant or industry and the lowest possible cost of a product. When a factory increases output, a reduction in the average cost of a product is usually obtained. This reduction is known as economy of scale.
Mass production, application of the principles of specialization, division of labor, and standardization of parts to the manufacture of goods. Such manufacturing processes attain high rates of output at low unit cost. Learn more about the history, uses, and economic and environmental effects of mass production.
