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Costs
Cost is the value of money that has been used up to produce something or deliver a service, and hence is not available for use anymore. In business, the cost may be one of acquisition, in which case the amount of money expended to acquire it is counted as cost. In this case, money is the input that is gone in order to acquire the thing. This acquisition cost may be the sum of the cost of production as incurred by the original producer, and further costs of transaction as incurred by the acquirer over and above the price paid to the producer. Usually, the price also includes a mark-up for profit over the cost of production. More generalized in the field of economics, cost is a metric that is totaling up as a result of a process or as a differential for the result of a decision. Hence cost is the metric used in the standard modeling paradigm applied to economic processes. Costs (pl.) are often further described based on their timing or their applicability. Types of accounti ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Opportunity Cost
In microeconomic theory, the opportunity cost of a choice is the value of the best alternative forgone where, given limited resources, a choice needs to be made between several mutually exclusive alternatives. Assuming the best choice is made, it is the "cost" incurred by not enjoying the ''benefit'' that would have been had if the second best available choice had been taken instead. The '' New Oxford American Dictionary'' defines it as "the loss of potential gain from other alternatives when one alternative is chosen". As a representation of the relationship between scarcity and choice, the objective of opportunity cost is to ensure efficient use of scarce resources. It incorporates all associated costs of a decision, both explicit and implicit. Thus, opportunity costs are not restricted to monetary or financial costs: the real cost of output forgone, lost time, pleasure, or any other benefit that provides utility should also be considered an opportunity cost. Types Expl ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Externality
In economics, an externality is an Indirect costs, indirect cost (external cost) or indirect benefit (external benefit) to an uninvolved third party that arises as an effect of another party's (or parties') activity. Externalities can be considered as unpriced components that are involved in either consumer or producer consumption. Air pollution from motor vehicles is one example. The Air pollution#Health effects, cost of air pollution to society is not paid by either the producers or users of motorized transport. Water pollution from mills and factories are another example. All (water) consumers are made worse off by pollution but are not compensated by the market for this damage. The concept of externality was first developed by Alfred Marshall in the 1890s and achieved broader attention in the works of economist Arthur Cecil Pigou, Arthur Pigou in the 1920s. The prototypical example of a negative externality is environmental pollution. Pigou argued that a tax, equal to the m ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Social Cost
Social cost in neoclassical economics is the sum of the private costs resulting from a transaction and the costs imposed on the consumers as a consequence of being exposed to the transaction for which they are not compensated or charged. In other words, it is the sum of private and external costs. This might be applied to any number of economic problems: for example, social cost of carbon has been explored to better understand the costs of carbon emissions for proposed economic solutions such as a carbon tax. Private costs refer to direct costs to the producer for producing the good or service. Social cost includes these private costs and the additional costs (or external costs) associated with the production of the good which are not accounted for by the free market. In short, when the consequences of an action cannot be taken by the initiator, we will have external costs in the society. We will have private costs when initiator can take responsibility for agent's action.de V. G ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Cost Of Goods Sold
Cost of goods sold (COGS) (also cost of products sold (COPS), or cost of sales) is the carrying value of goods sold during a particular period. Costs are associated with particular goods using one of the several formulas, including specific identification, first-in first-out (FIFO), or average cost. Costs include all costs of purchase, costs of conversion and other costs that are incurred in bringing the inventories to their present location and condition. Costs of goods made by the businesses include material, labor, and allocated overhead. The costs of those goods which are not yet sold are deferred as costs of inventory until the inventory is sold or written down in value. Overview Many businesses sell goods that they have bought or produced. When the goods are bought or produced, the costs associated with such goods are capitalized as part of inventory (or stock) of goods. These costs are treated as an expense in the period the business recognizes income from sale of the good ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Overhead (business)
In business, an overhead or overhead expense is an ongoing expense of operating a business. Overheads are the expenditure which cannot be conveniently traced to or identified with any particular revenue unit, unlike operating expenses such as raw material and labor. Overheads cannot be immediately associated with the products or services being offered, and so do not directly generate profits. However, they are still vital to business operations as they provide critical support for the business to carry out profit making activities. One example would be the rent for a factory, which allows workers to manufacture products which can then be sold for a profit. Such expenses are incurred for output generally and not for particular work order; e.g., wages paid to watch and ward staff, heating and lighting expenses of factory, etc. Overheads are an important cost element, alongside direct materials and direct labor. Overheads are often related to accounting concepts such as fixed costs and ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Cost–benefit Analysis
Cost–benefit analysis (CBA), sometimes also called benefit–cost analysis, is a systematic approach to estimating the strengths and weaknesses of alternatives. It is used to determine options which provide the best approach to achieving benefits while preserving savings in, for example, transactions, activities, and functional business requirements. A CBA may be used to compare completed or potential courses of action, and to estimate or evaluate the value against the cost of a decision, project, or policy. It is commonly used to evaluate business or policy decisions (particularly public policy), commercial transactions, and project investments. For example, the U.S. Securities and Exchange Commission must conduct cost–benefit analyses before instituting regulations or deregulations. CBA has two main applications: # To determine if an investment (or decision) is sound, ascertaining if – and by how much – its benefits outweigh its costs. # To provide a basis for comparing in ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Economics
Economics () is a behavioral science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interactions of Agent (economics), economic agents and how economy, economies work. Microeconomics analyses what is viewed as basic elements within economy, economies, including individual agents and market (economics), markets, their interactions, and the outcomes of interactions. Individual agents may include, for example, households, firms, buyers, and sellers. Macroeconomics analyses economies as systems where production, distribution, consumption, savings, and Expenditure, investment expenditure interact; and the factors of production affecting them, such as: Labour (human activity), labour, Capital (economics), capital, Land (economics), land, and Entrepreneurship, enterprise, inflation, economic growth, and public policies that impact gloss ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Economic Cost
Economic cost is the combination of losses of any goods that have a value attached to them by any one individual. Economic cost is used mainly by economists as means to compare the prudence of one course of action with that of another. The comparison includes the gains and losses precluded by taking a course of action as well as those of the course taken itself. Economic cost differs from accounting cost because it includes opportunity cost. (Some sources refer to accounting cost as ''explicit cost'' and opportunity cost as ''implicit cost''.) Aspects of economic costs *Variable cost: Variable costs are the costs paid to the variable input. Inputs include labor, capital, materials, power and land and buildings. Variable inputs are inputs whose use vary with output. Conventionally the variable input is assumed to be labor. ** Total variable cost (TVC) is the same as variable costs. * Fixed cost (TFC) are the costs of the fixed assets those that do not vary with production. **Tot ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Manufacturing
Manufacturing is the creation or production of goods with the help of equipment, labor, machines, tools, and chemical or biological processing or formulation. It is the essence of the secondary sector of the economy. The term may refer to a range of human activity, from handicraft to high-tech, but it is most commonly applied to industrial design, in which raw materials from the primary sector are transformed into finished goods on a large scale. Such goods may be sold to other manufacturers for the production of other more complex products (such as aircraft, household appliances, furniture, sports equipment or automobiles), or distributed via the tertiary industry to end users and consumers (usually through wholesalers, who in turn sell to retailers, who then sell them to individual customers). Manufacturing engineering is the field of engineering that designs and optimizes the manufacturing process, or the steps through which raw materials are transformed i ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Cost Overrun
A cost overrun, also known as a cost increase or budget overrun, involves unexpected incurred costs. When these costs are in excess of budgeted amounts due to a value engineering underestimation of the actual cost during budgeting, they are known by these terms. Cost overruns are common in infrastructure, building, and technology projects. For IT projects, a 2004 industry study by the Standish Group found an average cost overrun of 43 percent; 71 percent of projects came in over budget, exceeded time estimates, and had estimated too narrow a scope; and total waste was estimated at $55 billion per year in the US alone. Many major construction projects have incurred cost overruns; cost estimates used to decide whether important transportation infrastructure should be built can mislead grossly and systematically. Cost overrun is distinguished from cost escalation, which is an ''anticipated'' growth in a budgeted cost due to factors such as inflation. Causes Recent works by Ahi ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Business Process Modelling
Business process modeling (BPM) is the action of capturing and representing processes of an enterprise (i.e. modeling them), so that the current business processes may be analyzed, applied securely and consistently, improved, and automated. BPM is typically performed by business analysts, with subject matter experts collaborating with these teams to accurately model processes. It is primarily used in business process management, software development, or systems engineering. Alternatively, process models can be directly modeled from IT systems, such as event logs. Overview According to the Association of Business Process Management Professionals (ABPMP), business process modeling is one of the five key disciplines within Business Process Management (BPM).Association of Business Process Management Professionals ABPMP (publisher): ''Guide to the Business Process Management common body of knowledge - BPM CBOK®'' in the translated and edited German edition of → European Assoc ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Kaldor–Hicks Efficiency
A Kaldor–Hicks improvement, named for Nicholas Kaldor and John Hicks, is an economic re-allocation of resources among people that captures some of the intuitive appeal of a Pareto improvement, but has less stringent criteria and is hence applicable to more circumstances. A re-allocation is a Kaldor–Hicks improvement if those that are made better off could hypothetically compensate those that are made worse off and lead to a Pareto-improving outcome. The compensation does not actually have to occur (there is no presumption in favor of status-quo) and thus, a Kaldor–Hicks improvement can in fact leave some people worse off. A situation is said to be Kaldor–Hicks efficient, or equivalently is said to satisfy the Kaldor–Hicks criterion, if no potential Kaldor–Hicks improvement from that situation exists. If an outcome is the highest it could possibly be, it is called a Hicks-optimal outcome. A Hicks optimal outcome is always Pareto efficient. Explanation A reallocation ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
