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Cost Drivers
Causes of the cost of an activity (e.g., economies of scale, policies, location, interrelationships)
Implications
Factors that cause a change in the cost of an activity, product, or service, often analyzed to identify opportunities for cost reduction and efficiency improvements.
Example
Example: A logistics company identifies fuel prices as a major cost driver for its operations, leading it to explore alternative fuel options and more efficient routing to manage costs.
Related Terms
Different from cost factors, which are more general, cost drivers are specific elements that directly influence the cost structure of a business.
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