Reduce the Rate of Cost for the Input Used to Produce the Output

Use the same type of input and the same activities, but pay less for the unit of input employed in producing the output. A reduction in rate is equivalent to a reduction in the number of inputs for the same ICD. For example, if a person who makes $10 per hour could produce the same amount of output as a person making $20 an hour, the substitution of the $10 person for the $20 person in the process would be equivalent to cutting the number of people required to do the work by 50%.

B. Reduce the quality of the input used by using a cheaper form of the input:

The reduction in quality should bring with it a reduction in the rate paid for the input.

Use input with lower Performance: Less Function: Less fashion or style

No.	Industry SIC	Year	Notes
1	0	1987	Booklet, “How to Save Money on Office Supplies,” advises that faxes can transmit one-page documents in 18 seconds for less than the cost of a postage stamp or a long-distance call.
2	0	2007	Travel experts advise business travelers on a budget to look at mid-priced chains which often offer fewer amenities but are less likely to tack on fees for things like wireless service than the larger companies.
3	1521	2005	Competing with Pulte and Centex for a dwindling number of homebuilding sites convinced smaller builders such as Comstock to develop projects on more niche-type sites on overlooked parcels of land. Comstock set up shop and began building homes in the Ralei
4	3661	2004	GRC buys most of its phones from women’s shelters, which usually have a surplus of old phones donated to assist victims of domestic violence. Like its competitors, GRC refurbishes many of the phones for sale in developing regions including Latin America a
5	5331	2002	The store buys unwanted/leftover items from brand-name manufacturers and sells them at price reductions of 20% to 40%.
6	5411	2004	Dollar stores, which sell staples and knickknacks at cut-rate prices, are now the fastest-growing retailers in America. They offer an alternative to those who find Wal-Mart too pricey or difficult to get to. From 2001 to 2004, the stores have grown by 34%, an increase of more than 4,000 stores. While they only total a small portion of Wal-Mart’s income, they are attracting more and more customers and name-brand products. Location is important for these stores, they can fit into downtown neighborhoods where Wal-Mart can’t and are also more accessible in terms of size and parking.
7	5661	2005	DSW Inc. is a brand-name shoe retailer. DSW has a talented team of buyers who are adept at accessing in-style designer-label goods at low prices and at making opportunistic buys. Constant restocking with new products is what drives the sales. As an off-price retailer, DSW can buy well-known brands and designer labels at low prices because of relationships it’s developed with vendors since its start in 1997. It has ties with 300 leading brands, including Kenneth Cole.
8	5999	2002	Overstock and Smart Bargains buy their products, mostly excess inventory, from manufacturers and retailers.
9	7379	1998	Kaplan’s Onsale buys surplus or distressed goods from companies at fire-sale prices so they can weather low online bids for the goods.
10	7812	2004	The risks of releasing a film are greater now with the movie going demographic shifting heavily to the under-25 age range. Following a handful of big time flops in the summer of ’03, including Lara Croft Tomb Raider: The cradle of Life, the studios are re
11	7841	1988	Non-hit tapes cost far less to buy, so their ROI sometimes exceeds that of more-popular hits.

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