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 Reliability:
Less well-known brand

No. Industry SIC Year Notes
1 2893 2005 More retail cartridge stores are springing up as consumers look for cheaper refills. New retail chains are offering consumers an easier and cleaner way to get cartridge refills. They can either wait for their cartridges to be refilled, or pick up a pre-filled one in stock. One retail chain sets up drop-off boxes at coffee shops and dry cleaners. Most chains have vans to do free pick-ups and drop-offs at local businesses.
2 3241 1991 Lafarge uses synthetic fuel supplied by Systech in its waste management facility.
3 5122 1986 Mail-order druggists say they can provide drugs more cheaply than many stores do, because of low overhead, large-quantity purchasing, and the use of generic drugs where possible.
4 5122 2001 Perrigo Co. produces over-the-counter store-brand products, which give them 25%-100% profit margins over selling national brands.
5 5331 2006 National brands face increasing competition as stores boost sales with their own labels. In 1975, private labels and private brands were 25% of the apparel market. In 2006, Marshel Cohen estimates that number will pass 50%, and by 2010, Cohen expects it to be over 60%. Companies like Gap and Chico long have engaged in this practice, but now chains like Target and JC Penney have come to rely on it as well. Target carries apparel lines designed by Issac Mizrahi and Massimo, which are sold exclusively at its stores. At JC Penney, clothing designed by Nicole Miller can be found nowhere else.
6 5411 2004 Trader Joe boasts success with its stocks of eclectic and upscale food products. Part of the reason the chain is so successful is that there is no competition. It sells products that are healthy, organic, and non-controversial at low prices. TJ also develops or imports many of its own products from sources it has developed over decades and sells more than 80% of them under the Trader Joe's brand or a variant. To save money, it moves into abandoned retail stores in second-rate locations and sells upscale products at low prices.
7 5411 2004 While dollar stores still rely on low-income households for the majority of sales, some dollar store companies are moving up the retail food chain. The lure of the decades-old dollar stores is putting pressure on major retailers who are also grappling with the effect of higher food prices and stagnant wages. Retailers including Target Corp., Albertsons Inc., and Kroger Co. have responded to the dollar-store phenomenon by installing aisles in stores devoted to items costing $1. It's a consumer trend they're not going to ignore.
8 5411 2006 National brands face increasing competition as stores boost sales with their own labels. In almost any category, of the top-three major selling brands, one of them is going to be a private label. Supermarkets are also part of the trend. The biggest players in the industry carry the largest selection of private labels. At Kroger, for example, about 25% of sales comes from private label products. It's 10% to 20% cheaper for the consumer, and the retailer makes a better margin.
9 6324 2008 Health Providers like Blue Cross Blue Shield are paying doctors to prescribe generic pills. For example, Blue Cross Blue Shield of Michigan rewarded primary-care physicians $100 for every patient for whom they prescribed a generic drug instead of the brand name.
10 6324 2008 Health Providers like Blue Cross Blue Shield are paying doctors to prescribe generic pills. Excellus says that the practices have improved generic prescription ratio and saved patients between 10% and 12% in drug co-payments and costs.
11 8011 1997 By agreeing to managed care in the event of an injury sustained in an automobile accident, individual drivers can save money on auto insurance premiums.

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