Effective management of a company’s cost drivers is essential for a company to be successful in eliminating or bypassing some cost-producing activities.
The two cost drivers with the biggest cost-saving potential are product design and supply chain efficiency.
The more cost drivers that a company has, the better are its chances of becoming the industry’s low-cost leader.
The three most important cost drivers are economies of scale, labor efficiency and pay scales, and capacity utilization.
The term cost drivers refers to a set of factors that have a strong effect on a company’s costs and can be used as levers to lower costs.
Jos Simulation Answered question April 5, 2025
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