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.

Combine fixed cost ICDs with competitors into a separate business. Combine ICDs from the major cost functions of the company:
Combine Create ICDs

No. Industry SIC Year Notes
1 3674 1982 In 1982, 11 chipmakers and computer manufacturers pooled $4 million to form a nonprofit research consortium called Semiconductor Research Corp.
2 3674 1983 In 1983, 12 chipmakers and computer manufacturers formed the Microelectronics & Computer Technology Corp.
3 3674 1998 SEMATECH's original objectives-improving member firms' semiconductor manufacturing process technology-underpinned its decision to build a large-scale fabrication facility in Austin.
4 3711 2002 By pooling their resources, GM, Ford, and Chrysler were more effective in shaping the clean-engine revolution and staying ahead of would-be insurgents than they would have been if each had tried to do so independently.
5 3724 1991 GE and Snecma made joint venture in 1974 to develop and manufacture jet engines. Spread the costs of developing a wider range of engines.

<<Return to Increase the Output