Tuesday, August 4, 2009

Structural Cost Drivers Example

What are Structural Cost Drivers? 

In a company, the types of activities and costs of activities performed to satisfy customer needs are influenced by an organization’s size, location, scope of operations, and technology employed.

Decisions affecting structural cost drivers are made infrequently, and are very hard to change once a decision is made. Some examples of possible structural cost drivers for a retail store might be:

  • Determining the size of stores 
  • Determining the type of construction
  • Determining the location of stores 
  • Determining types of technology to employ in stores
  • Determining how many stores to open
  • Determining the amount to spend on construction

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