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%.

F. Change source of supply to a less expensive supplier:

A change in the supplier relationship may enable the company to switch to a less expensive supplier. The supplier may be less expensive because it has lower costs or because it reduces the company’s logistic expenses.

Move inside or outside boundaries to purchase without tariffs and regulations

No.	Industry SIC	Year	Notes
1	2911	2006	Companies like Royal Dutch Shell and Exxon Mobil have found ways to cut oil prices by using floating oil factories, which allow tankers to load at sea, avoiding political instability and saving billions. For the oil companies, the benefits abound. FPSOs spare them billions of dollars in infrastructure costs, years of construction time, and significant costs and set backs associated with political instability. FPSOs are now pumping off the coasts of Brazil, West Africa, and Southeast Asia, extracting more than 5 million barrels per day, up from 1.5 million barrels five years ago.
2	3312	2002	Some steel producers from China, Brazil, Europe and Canada see opportunity. To them, the U.S. Industry's changes and severe need for cash offer possibilities of gaining a foothold in the U.S. Market and avoiding tariffs the Bush administration recently imposed.
3	3600	2006	Legendary leveraged buyout (LBO) firms like Kolberg Kravis Roberts & Co. are now getting many frustrated techies to consider the option of turning their companies private. After a half-decade of crushing pressure to hit their quarterly numbers, stagnant or shrinking stock prices, and scrutiny on everything from offshoring to stock option accounts, the companies believe they can thrive outside the glare of public scrutiny. Going private would allow the companies to reduce capital costs. In return, the companies have to be financed in part with high-yield bonds, which require quarterly reporting. Private owners can also be more demanding than Wall Street.
4	3711	2005	Toyota is building the new Hilox and related models in developing countries using parts made almost entirely in factories strategically located to take advantage of regional free-trade zones and cheap labor. With the new strategy, Toyota hopes to boost its sales numbers while dampening the risks that foreign-currency conversions will eat up all its profits.
5	3800	1989	Stanley putting hi-tech factories in Europe and the Far East instead of exporting, on the theory that rapid sales growth in these markets requires on-site production: get inside tariff barriers, reduce delivery time, capture new manufacturing techniques.
6	3999	1987	Sony sells about 1.25 million color TVs in the US, but now makes them all in N. America to avoid tariffs.
7	4213	1997	Pitt Ohio will experiment with city trucks which have greater mobility, can make more stops, and have a lower driver pay scale since they don't require DOT-certified license.
8	4813	1999	Net2Phone can offer bargain calling rates because the charges and tariffs the govt. imposes on telecom carriers don't apply to Internet telephony providers.
9	5541	2006	The discount dynasty in Wyoming, run by the Call family, keeps the gasoline cheap. Wyoming's fuel levies, 32 cents per gallon in combined federal and state taxes, are the country's lowest outside of oil-rich Alaska. Wyoming has low taxes in general because the state collects so much in royalties on all the coal, oil, and natural gas extracted there.
10	5632	2005	Steve & Barry's University Sportswear has become one of the fastest growing retailers due to their mantra of low costs. Squeezing a few pennies out of an import duty is a big deal. Steve & Barry's has mastered the U.S. apparel trade law. For example, a man's nylon jacket coming from China typically has a duty of 28%, but Steve & Barry's orders a design that reclassifies the garment as a raincoat, causing the duty to drop to as little as 4%. Women's cotton khakis have 17% duty; if they're synthetic, 29%. But Steve % Barry's khakis are more than 50% natural fiber, dropping the duty to 3%.
11	5651	2006	Steve & Barry's University Sportswear lures shoppers with casual clothing priced $7.98 or less – a 40% discount to prices at Wal-Mart Stores Inc. and Target Corp. The chain cuts expenses further by deft navigation of import quotas and duties. That's why it buys more from factories in Africa and less from China than many rivals – most African countries face neither U.S. quota nor duties.
12	5900	2007	As more Americans use credit and debit cards for their daily purchases, retailers are encouraging customers to use a pin number rather than signing for their credit card purchases. At the same time, credit card companies rarely offer rewards if customers use a pin in an effort to encourage customers to sign. The fees for pin-based transactions are lower. Large retailers like Sears and JCPenneys are rolling out PIN devices in their stores and some estimate that large retailers can convert 80% to 90% of transactions to PIN, which would result in $8.5 million in savings annually.
13	7514	2005	New local legislation by cities may increase the costs paid by travelers who rent cars. Often, these fees are levied to pay for stadiums, museums and public transportation. Ranging from 0.8% of the bill to $10 per day, these fees can equal up to a third of the bill for an economy car. Varying from region to region, savvy travelers can rent from neighborhood, not airport, centers or research the taxes from surrounding areas.

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