Reduce the Rate of Cost for the Input Used to Produce the Output

Use the same type of input and the same activities, but pay less for the unit of input employed in producing the output. A reduction in rate is equivalent to a reduction in the number of inputs for the same ICD. For example, if a person who makes $10 per hour could produce the same amount of output as a person making $20 an hour, the substitution of the $10 person for the $20 person in the process would be equivalent to cutting the number of people required to do the work by 50%.

D. Use subsidies offered by third parties to reduce total rate:

While the company may pay the regular price to the vendor of the product, subsidies available in the market place may reduce this effective rate by offsetting part or all of the purchase price.

Use government sponsored programs:
Social welfare programs

No.	Industry SIC	Year	Notes
1	0	1987	Short time compensation is when, instead of layoffs during a downturn, companies are encouraged to voluntarily split reduced work among existing staffers by cutting the hours and paychecks of all. State unemployment benefits make up for some of the lost p
2	1521	2004	The Syracuse program, called Home Equity Protection, protects about $4.6 million in home equity against declines in the value of an index of local house prices. It sells protection of as much as 150% of a home's assessed value for a one time fee of 1.5% o
3	2052	2007	Corporations are trying to minimize their responsibility for rising healthcare costs. Kellogg Co ended its group program for Medicare-eligible retirees in its Keebler Unit. Members will receive money under a health-reimbursement arrangement that they can
4	4813	2003	Companies that focus on rural areas not only receive virtually no competition, but also subsidies from the Universal Service Fund.
5	5331	2006	Wal-Mart launched its Value healthcare program for employees which offers low premiums but high deductibles. Many employees who had previously declined coverage signed up. The retailer will also increase its contribution to employee Health Savings Account
6	5411	2004	While dollar stores still rely on low-income households for the majority of sales, some dollar store companies are moving up the retail food chain. Dollar General is also selling fresh food, including milk, eggs, lunch meat, and even frozen shrimp. Custom
7	5411	2005	To find growth, Save-A-Lot is setting up shops in inner cities. Sites too small for modern supermarkets, which are typically 45,500 square feet, fit Save-A-Lot's compact 16,000 square foot format. The company helps shoppers apply for food stamps, which ac

<<Return to Reduce the Rate of Cost