Increase the Output Over Which a Fixed ICD is Used
This action reduces the quantity of a unique fixed cost ICD used to produce a unit of Output by increasing the units of Output. For example, a new product design, or a new process patent, are both ICDs that have virtually limitless capacity for use. These are fixed cost ICDs. You pay for them once and you can use them over a virtually unlimited amount of Output. Their ICD/O ratios are limited only by the current demand level for Output.
Use fixed cost ICDs with more customers – By using fixed cost ICDs with more customer volume, the unit cost of the ICD declines as a component of the final Output cost.
Use fixed cost ICDs with competitors who employ outsourcing. Sell ICDs in major cost functions of the company:
Sell Sell ICDs
|1||2024||2003||Dreyer's also signed a new agreement with Ben & Jerry's to distribute its products nationally.|
|2||4812||2002||Virgin Mobile leases its transmission capacity from Sprint and sells its services through 21 Virgin stores, 450 Best Buys, 1050 Target stores and some 2200 other stores.|
|3||5181||2007||Beer distributors have begun distributing nonalcoholic drinks to compensate for rising costs amidst flat beer sales. Anheuser-Busch allows its distributors to distribute its energy drinks. However, it offers incentives to those companies that only carry brands it owns or has an affiliation with.|
|4||5812||2007||Wendy's consolidated ordering at 16 stores, installing a call center designed to handle drive-through orders for all of its stores. As a result, orders were more accurate and order takers had the time to up-sell customers on additional items. While the program is expensive, the company is marketing the service to other restaurants which distributes the cost.|
|5||6211||2005||Triple-A credit rating is declining in popularity. If you are running a company, you have to balance the interests of lenders and shareholders. Thirty years ago, the balance was tipped in favor of lenders. At that time, corporate borrowers depended heavily on banks, and banks tended to keep the loans they made. Lenders are also willing to tolerate more risk, in part because of financial innovations that allow them to spread and hedge risks. For example, many banks now package the loans they make and sell them to institutions.|
<<Return to Increase the Output