IE 34300 Chapter Notes - Chapter 2&4: Indirect Costs, Sunk Costs, Variable Cost

• School: Purdue University
• Department: Industrial Engineering
• Course: IE 34300
• Professor: Agostino Capponi

Document Summary

Incremental costs: additional cost that results from increasing the output of a system by one (or more) units. 2. 1. 5 opportunity cost: opportunity cost: incurred because of the use of limited resources, such that the opportunity to use those resources to monetary advantage in an alternative us is foregone. Involves detailed design and planning for production or construction. The greatest potential for achieving life-cycle cost savings is early in this phase: the operation phase: the production, delivery, or construction of the end items and their operation or customer use occur. 2. 2. 1 consumer and producer goods and services: consumer goods and services products or services that are directly used by people to satisfy their wants, producer goods and services used to produce consumer goods and services or other producer goods. 2. 2. 2 measures of economic worth: goods and services are produced and desired because they have utility the power to satisfy human wants and needs.