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 consistent quality of components

No. Industry SIC Year Notes
1 3339 1997 In addition, due to margin constraints brought on by low selling prices, stainless steel mills (particularly in Europe) have continued to maximize their use of stainless steel scrap, which remains cheap and readily available.
2 3571 1988 Western Wheel Works was one of 1st to produce bikes out of stamped (rather than forged) parts, greatly reducing costs. Western soon became the biggest bicycle-maker in U.S.
3 3571 1995 Packard Bell "recycles" components from returned computers if they pass quality tests.
4 3571 2004 Dell's new line of products come as Hewlett-Packard launches a line of servers powered by Advanced Micro Device Inc.'s Opteron chips. Dell continues to only use Intel processors.
5 3600 2004 Raytheon increased its missile production by revamping its whole manufacturing system. Suppliers also cooperated. Instead of having a part bubble-wrapped and then taped into a box for shipment, Raytheon devised reusable containers with precut padded casings, simplifying the packing process. Once the company received a parts shipment, workers could empty it in a matter of minutes and return the casing to the supplier for a refill.
6 3751 1998 Seat posts, handlebars, pedals, cranks, and gear shifters are now being made from carbon fiber and inexpensive molded thermoplastics that are less expensive than former materials.
7 7375 2006 There's a new, well-designed, free online service for finding the value of a home called The site hopes to make money through advertising. When estimating home values, real-estate agents can draw on the Multiple Listing System, as well as their own local knowledge. Zillow doesn't have access to the MLS or to agents' local savvy. So, it draws on roughly 10 commercial providers of real-estate data, which supply information like a home's sale history, tax assessment and payment history, comparable home sale prices, and number of rooms in a home. This information is largely collected by the commercial-data providers from government records. Zillow also obtains some government records directly. The company acknowledges that its raw data on comparable sales can be 3-6 weeks older than the data in the MLS system that agents use.

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