Reduce the Units of Input Not Producing Output

Reduce units of Input (I) available but not producing Intermediate Cost Drivers
(ICDs). This action makes Input levels more directly variable with the quantity of the ICD by reducing the amount of the available Input that is wasted or idle. For example, an employee (I) might produce one subassembly (ICD) per day. During that day, the employee spends a total of one hour waiting for parts for the subassembly. If the Company could eliminate that one lost hour of the employee's work day by providing parts in a more timely manner, the Company could reduce the number of employees (I) needed to produce the same subassembly (ICD) by 1/8th.

D. Use short term sources of Input to meet peak demand.

The company would intentionally plan less capacity than it would need to meet its peak demand. It would supply the peak with other sources of capacity.


No. Industry SIC Year Notes
1 6324 2004 Aetna Inc. is taking steps to cut down the costs of healthcare by turning to medical experts. It's using staff nurses to provide one-on-one guidance over the phone for some cardiac patients. Such personal contacts helps Aetna's bottom line. Aetna says its program has resulted in a 12% reduction in in-patient admission rates for heart-failure patients, compared with a 2% increase among the Aetna heart-failure population that didn't have such contacts. Emergency room visits fell by 2% for such patients, compared with an increase of 47% for patients not in the program.
2 6324 2004 Aetna Inc. is taking steps to cut down the costs of healthcare by turning to medical experts. At Aetna in Ohio, it noticed that too many members went to the ER for things that required doctor attention, but that could be monitored safely at home rather than a hospital. In 2001, it launched a pilot project in Cincinnati that encouraged doctors to send home patients with simple pneumonia, dehydration, or gastroenteritis. An Aetna nurse would visit the patient's home to set up intravenous hydration, antibiotics, oxygen, and 24-hour monitoring devices. Doctors could keep in contact over the phone and still get paid for services. The average episode of simple pneumonia costs $7,155 to treat in the hospital but only $1,650 to treat under Aetna's home program.

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