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 new customer segments. Sell ICDs in major cost functions of the company:
Sell Make ICDs

No. Industry SIC Year Notes
1 2086 1994 PepsiCo markets Lipton iced tea in a partnership with Lipton. Once tea process is completed, the filling and packaging process is the same as for beer or cola, generating economies of scale.
2 2800 2005 A company called American Promotions is offering thousands of boxes of used Kodak batteries for free after a mail-in rebate. The batteries have "minimal previous use" because they've been briefly tested before repackaging. The batteries are really from Kodak. The batteries are used in the tens of millions of Kodak disposable cameras sold each year at theme parks and other tourist attractions. The typical disposable camera is designed to be reused up to 10 times and it is estimated that most resold Kodak batteries still have about 80% of their charge remaining.
3 3571 2005 Sun has formed a partnership with Archipelago Holdings, the online stock market, in creating an online exchange where companies can bid for computing power.
4 3652 2002 Today, Universal Music Group, the world's biggest label, is expected to announce it has licensed music from its roster of stars–including Eminem, Sheryl Crow, Beck, Jay-Z and U–to the online music subscription service offered by Inc.
5 3731 1987 Todd plans to start refurbishing instead of building ships. Ship repair requires less shipyards, less engineering and QA requirements.
6 3827 2002 1-800 Contacts reached deal with Vistakon, a division of Johnson & Johnson, to become an authorized dealer of its contact lenses.
7 4513 1996 UPS is studying the passenger service which would involve 59 Boeing 727 cargo aircraft that remain idle on weekends.
8 4513 2000 Since Airborne Freight's unused space on airplanes has doubled to 40% (due to less deliveries and larger planes), it will start renting out space through its Web site.
9 4812 2005 Cell phone companies are finding mass business in developing countries. Both Nokia and Motorola are making models for as little as $25, allowing gross margins of 15% to 30% at current prices. That compares with the overall 33% margins across Nokia's entire handset portfolio. Big volumes of low-end phones can also unleash economies of scale that can reduce costs even for high end models.
10 4812 2006 Vodafone Group PLC has recently laid out plans to launch a mobile-advertising service in conjunction with Yahoo Inc. The two companies will jointly develop the look and feel of the advertisements that will likely include a variety of formats from banner ads to short video clips. Vodafone also will use Yahoo's sizable sales force to sell to advertisers, rather than spend the resources on building its own. Vodafone and Yahoo plan to use customer information to target their efforts. Yahoo's technology, which Vodafone will use as a part of the arrangement, enables advertisers to direct their messages at people depending on gender, demographic group, location, and user behavior.
11 6211 1991 Merrill squeezes revenue from outsider use of in-house facilities; Tennis Week is printed in its Tritech Services arm.
12 7389 2005 Some of the biggest music companies are selling instant recordings of concerts in an effort to combat piracy. The idea took a leap forward when Vivendi Universal SA's Universal Music and Instant Live, owned by Clear Channel Communications Inc., announced a blanket licensing agreement that lays the groundwork for Instant Live to issue concert recordings by Universal recording artists – providing the acts want to participate. Other music companies are launching their own efforts. Sony BMG operates a Web site called, which sells live recordings of a handful of its acts for $6.98 to $13.98. A new venture backed by AOL, XM Satellite Radio Holdings Inc. and Anschutz Entertainment Group Inc. launched last week is set to broadcast concerts live on the Internet and other channels.

<<Return to Increase the Output