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%.

F. Change source of supply to a less expensive supplier:

A change in the supplier relationship may enable the company to switch to a less expensive supplier. The supplier may be less expensive because it has lower costs or because it reduces the company’s logistic expenses.

Source from new suppliers in better locations for costs: Near low-cost labor:
Other

No.	Industry SIC	Year	Notes
1	3562	2003	In the early 1990s, Timken watched as rivals shifted high-volume manufacturing to low-cost emerging markets overseas. It followed suit- up to a point. But Timken also committed $150 million to build the most sophisticated factory it had ever attempted- the Asheboro plant, which can manufacture small batches of goods without refitting machine tools between runs.
2	3674	1993	Intel placed its new plant in Ireland, where it can pay lower wages for professionals.
3	4813	1994	AT&T is aggressively hiring abroad. 10 years ago, it had only 60 employees outside the U.S.; today, it boasts 54,000, including 20,000 managers.
4	7389	2003	Electronic Data Systems (EDS) has been victimized by cheap outsourcing by its competitors, so EDS is also playing the low-cost labor game. It is hiring thousands of mostly Asian college graduates. EDS plans to hire 13,800 workers by the end of next year, a tenth of its current global workforce of 137000, in low-wage countries like India, Malaysia, Hungary, and Mexico, places where starting pay is as low as $2400 a year. EDS plans to lay off at least 2750 higher-paid workers, mostly in Europe and the US.

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