Increase the Output Over Which a Fixed Cost 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 Lcoate ICDs
|1||4512||2000||SkyWest's success rests on its contracts. 65% of its flights are fee-per-departure deals. That means that each flight has a set price, no matter the ticket pricing or the number of customers.|
|2||4512||2001||Atlantic Coast Airlines is a regional airline that is doing quite well. It has signed a 10-year agreement with Delta and United that presold 100% of its seats, thus ensuring an earnings growth of 20% to 40% for each of the next two years.|
|3||4813||2004||Sprint PCS is the nation's #4 wireless phone company and it employs a rent-a-network strategy. This strategy has allowed the company leeway so that it doesn't have to rush into any merger. Sprint Corp. is looking for more partners to buy capacity on the PCS wireless network. These companies than resell the services back to user and PCS gets more money. Sprint is the only one to do this in the major U.S. wireless carriers.|
|4||5399||2001||Amazon has a new tale of brick and mortar partnerships with the likes of Target that will put Amazon on the road to profitability. Target is estimated to be doing anywhere from $45 million to $100 million in sales online each year.|
|5||5999||2003||Amazon owns the sales data from Borders transactions online. They do, however, share information with Borders that allows them to directionally serve customers better. This deal allows Borders to focus on its core mission: selling books in its stores.|
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