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4 Examples of Cost Efficiency

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Cost efficiency is the ratio of cost to output. It is based on the efficiency formula and has many industry specific variants. The following are illustrative examples.

Energy

Cost per watt is a common cost efficiency metric for energy production, particularly solar panels. It includes all costs required to buy, install and connect a solar system.

Marketing

Customer acquisition cost is a common cost efficiency metric for sales and marketing. It includes all costs of acquiring a customer in order to compare different marketing strategies.

Transport

Cost per passenger kilometer can be used to compare transportation alternatives. This doesn't always include secondary costs such as the time consumed by a slow mode of transport or the environmental cost of pollution.

Manufacturing

Cost per unit is the cost to produce one unit of a product to specifications. It is an important management accounting metric that is used to plan production and model profitability.
Overview: Cost Efficiency
Type
Definition
Cost per output.
Notes
Cost efficiency is used to denote calculations of cost per output. The term cost effectiveness is used for analysis that considers different strategies and outcomes and the value for cost of each.
Related Concepts

Efficiency

This is the complete list of articles we have written about efficiency.
Bottleneck
Division Of Labor
Business Efficiency
Efficiency Goals
Debottlenecking
Inefficiency
Jevons Paradox
Economic Efficiency
Overpackaging
Efficiency Formula
Resource Efficiency
Throughput
Value Creation
Machine Efficiency
Management Efficiency
More With Less
Operational Efficiency
Process Efficiency
Specialization Of Labor
Technical Efficiency
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