Increase the Output Over Which a Fixed 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.

B.
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.

Used fixed cost ICDs with competitors who employ outsourcing. Sell ICDs in major cost functions of the company:
Sell Make ICDs

No.	Industry SIC	Year	Notes
1	2082	1998	Having established a nine-year contract with The Stroh Brewery Company in 1995, Pete's contracts the manufacturing of its product at Stroh's Winston Salem, North Carolina plant.
2	2711	1996	Central Newspapers used to publish morning and afternoon papers in 3 markets: Indianapolis, Phoenix and Muncie, Indiana. The Muncie Star and Muncie Evening Press were combined to become The Muncie Star Press.
3	2833	2004	Teva is the world's leading supplier of active pharma ingredients to the generics industry. This gives it a raw-material sourcing and pricing advantage.
4	2834	1994	As generic competition erodes their sales, pharmaceuticals seek to use idle capacity by manufacturing for rivals. Schering-Plough produces eye ointments and antibiotics for other companies at its plant in Puerto Rico.
5	3571	1988	Acer has used basically the same parts in machines sold under different labels, allowing economies of scale that are crucial to the company's phenomenal growth.
6	3571	1993	Instead of closing under-used plants, laying off workers, and wiping out earnings with costly write downs, IBM, DEC, and other big computer makers are building products for other companies.
7	3571	2004	Apple made a deal with Hewlett Packard in which Apple will manufacture an HP branded digital music player with its iTunes software installed and Hewlett-Packard's consumer PCs and notebooks will come with Apple's iTunes software preinstalled.
8	3639	1998	Home Depot has made an alliance with GE and Rheem (which makes water heaters). Why is Rheem building a product that will surely compete with its own? Incremental sales; no matter which one you buy, they win.
9	3679	1990	Tandy in addition to selling its personal computers through its Radio Shack chain, supplies notebook and desktop computers to DEC and Matsushita to be sold under their names. Also Tandy agreed to build a tapedeck for Phillips.
10	3711	2005	Mitsubishi Motors has sold its headquarters building in Tokyo to raise cash and has plans to reduce staff by 30%, largely through attrition. Mitsubishi also plans to shutter a factory in central Japan. To boost sales, it recently agreed to boost the number of mini-vehicles it produces for sale under Nissan's brand to 59,000 from 20,000. It is also negotiating with SGA Peugeot Citroen about a similar agreement.
11	4213	1998	Covenant will begin hauling inter-regional shipments for Con-Way this month and is also in discussions with FedEx regarding the possibility of becoming a core carrier.
12	4812	2004	Sprint PCS' partner, Virgin Mobile USA has signed up 1.4 million customers and Qwest Communications, another partner, is giving PCS 900,000 customers this year. "The wholesale model is working very well for us." Sprint PCS is also planning to hire IBM to handle customer service operations which would cut costs even more.
13	4812	2004	Sprint PCS' partner, Virgin Mobile USA has signed up 1.4 million customers and Qwest Communications, another partner, is giving PCS 900,000 customers this year. "The wholesale model is working very well for us."
14	4812	2005	Southwest Airlines has come up with new ways to compete as rival companies, such as JetBlue and AirTran, copy Southwest's flight model, but add amenities and slash the costs. Southwest has responded by partnering with ATA to reach more cities, starting to fly into major airports along with other big airlines instead of smaller regional airports, and closing reservations centers around the country, all without firing any employees.

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