Opportunity Cost Definition

The business environment focuses on making healthy investments and earning sizeable profits. Several companies in the same industry or even suppliers who provide heterogeneous products allow customers the opportunity to select from an immeasurable variety. Hence, those companies have to strive for recognition, remain spirited and match their competitors’ offers. Because competition is the driving force in business, it hinders companies’ growth and profit making abilities. Nevertheless, companies can overcome this obstacle by controlling or minimizing costs. However, if a company wants to lessen cost, it has to understand the cause and effect relationship between cost and its activities. Kocakulah stated that controlling expenses in a bank can

Introduction Cost management revolves around reducing, estimating, containing and avoiding costs using various different methods (Drury, 2008) (Groth and Kinney, 1994). Reducing costs is done through seeking to lower both fixed and variable costs associated with an activity. Containing costs is achieved by constraining or avoiding future increases to costs and cost avoidance revolves around eliminating unnecessary activities (Groth and Kinney, 1994). Cost management starts at identifying how costs arise and the events associated with them, only once activities have been identified can they start to be managed successfully.

Every business decision involves cost. Understanding cost allow manger to make efficient decision, mete out strategies and better manage risk.

The benefits of going to college may outweigh the cost if getting a degree makes students more marketable, secures job placement, and if the future salary is greater in return than the investment

The challenge is not only on the redoing the scope of the project and all it’s boundaries, but how to handle the customer, and how to do the project within the current budget. However, I can think of two situation in which the cost cant effect the project overall performance or goal. The first is when an addi...

management costs , payroll processing costs , paying overtime work , training and development costs and sick cover . Usually , in-house maintenance team do not have enough skill so , it maybe needs some cost for processing the procurement and payment of spares .If one of the hidden cost is overlooked which it also the company cost, it will make the production lost.As an engineer the value of the product must come first because it will show our reputation as a good engineer to our client. But, if engineers more consider to the value than the hidden cost , it will makes cost of the company less relevant . This is the dilemma that engineers needs to face

In the article “Opportunity Cost Consideration”, Stephen Spiller aims at addressing the various issues that are involved in the decision making process of consumers. Spiller argues that buyers need to involve the concept of opportunity cost in their purchasing decisions so that they can manage to meet their unlimited wants using limited resources (Spiller 595). In relation to this, the article focuses on when buyers should embrace opportunity cost, individuals or parties that embrace opportunity cost, opportunity cost that spring into buyers’ minds and consequences involved in the consideration of the opportunity cost. The author accomplishes his goal by conducting several studies. These studies are fall under various categories such as application of multiple mechanisms in assessing opportunity cost consideration, self-reported consideration, thought listings and possibility of purchase. Thus, the author’s findings play a vital role in highlighting consumers’ need to embrace opportunity costs in their purchase decisions.

In economics, when we are trying to fully understand the cost of our decisions, we don’t only analyze the monetary costs but also what we have to give up in order to make our selection. Monetary costs are referred to, in the economics world, as explicit costs, and are typically easy to analyze (OpenStax, 2014). It’s the items or even time that we must give up, that are a bit more difficult to quantify. These costs are referred to as implicit costs (OpenStax, 2014). In the business setting, these could be the use of company owned resources or even the business owners time.

Cost it: Cost the opportunity, run reports, and compare the results to the organization’s base case or to Marketing’s target.

Alongside of utility theory, opportunity cost is given many examples. Opportunity cost being, “The most highly valued opportunity or alternative forfeited when a choice is made.” (Arnold) In this film a great number of opportunity cost are weighed and