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 Convenience:
Less assistance to find, choose and pay for product

No. Industry SIC Year Notes
1 4512 2004 A discount of $5 is awarded for booking tickets online, as a move to promote online ticket reservations. As a result 63% of the tickets were booked online in 2002, which is also JetBlue's cheapest form of distribution.

<<Return to Reduce the Rate of Cost