Cost minimization

Selective use of international transportation modes is now common in the personal computer industry, in which items with low added values are normally carried by sea in order to reduce transportation costs (scale economy), whereas key parts with higher added values are selected according to demand shifts and are transported by air. 

It follows that the company needs to build a set of logistics capabilities to respond to the external and internal drivers, discussed above. As shown in Fig. 5.3, the four first tier capabilities are warehousing, transportation, packaging, and managing customers. The cluster of capabilities, labeled managing customers refers to external drivers, whereas the other three clusters labeled warehousing , transportation , and packaging , are related to the internal drivers. 

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Different phenoHc resins are used for different types of wood for example, plywood adhesives contain alkaline-catalyzed Hquid resole resins. Extension with a filler reduces cost, minimizes absorption, and increases bond strength. These resins have an alkaline content of 5—7% and are low in free phenol and formaldehyde. Because many resins have a high water content and limited storage stabiHty, they are frequently made at or near the mill producing the plywood product. The plywood veneers are dried, coated with resin, stacked for pressing, and cured at 140—150°C. 

When a single technique is employed only local life-cycle cost minimization is achieved. If the global life-cycle cost is to be minimized, a number of techniques have to be applied (Watson et al., 1996). In this case, tools and techniques shouldn t compete with each other, but be complementary in the product development process. The correct positioning of the various off-line tools and techniques in the product development process, therefore, becomes an important consideration in their effective usage. Patterns of application have been proposed by a number of workers over several years (Brown et al., 1989 Jakobsen, 1993 Norell, 1993) and the importance of concurrency has been highlighted as a critical factor in their use (Poolton and Barclay, 1996). 

Collecting a sample is a costly and timestack testing analysis to decide whether to purchase a 10,000 scrubber of 95% efficiency or to try to get by with a 7000 scrubber of 90% efficiency. 

The facility costs are based on the concept of a mobile remote repair facility. The advantages of this concept are low-cost, minimal shielding requirements, and flexible use of the overall repair facility. The main components for a remote repair are the electron accelerator, the power supply, and the robotic control system including the remote video system. Table 14 shows the estimated costs for these main components. 

I. Material cost minimization The main consideration here is the problem of efficient catalyst material utilization which requires the use of thin (e.g. 10 nm thick) catalyst electrodes or dispersed catalysts.7... 

MATERIAL COST MINIMIZATION DISPERSED AND COMMERCIAL CATALYSTS... 

Cost-minimization analysis concerns a direct comparison only between treatments that produce identical outcomes. However, other than in the case of generic substitution,... 

There are four types of economic evaluation cost-minimization analysis, cost-effectiveness analysis, cost-utility analysis and cost-benefit analysis. The analytic framework chosen will depend upon the economic questions posed and the clinical evidence of effectiveness for the interventions (Gold et al, 1996 Dmmmondetal, 1997). 

Cost-minimization analysis compares the direct costs of two or more health-care interventions. This form of analysis is only useful if there is clear and reliable evidence... 

McCue MJ, Mazmanian PE, Hampton CL, Marks TK, Fisher EJ, Parpart F, Malloy WN, Fisk KJ. Cost-minimization analysis A follow-up study of a telemedicine program. Telemed J 1998 4 323-327. 

A rigorous approach to the discretization of equipment sizes involves the use of standard equipment sizes already at the start of the cost minimization problem, i.e. Eqn. 7.4-31 is solved but with Vj chosen for each stage from a set of standard equipment units DSVj of type j. The objective function then is formulated as ... 

We can then conclude that while the discrete time STN and RTN models are quite general and effective in monitoring the level of limited resources at the fixed times, their major weakness in terms of capability is the handling of relatively small processing and changeover times. Regarding the objective function, these models can easily handle profit maximization (cost minimization) for a fixed time horizon. Intermediate due dates can be easily modeled. Other objectives such as makespan minimization are more complex to implement since the time horizon and, in consequence, the number of time intervals, are unknown a priori (see [11]). 

The computational equipment was a 3.06 GHz Xeon machine with 2 GB of main memory and Linux operating system. All tests were limited to five million of visited nodes and this limit was reached in all test runs. The configuration of the waiting list W of TAopt was depth-first search combined with cost minimization. In order to reduce the search effort, the search space was reduced by reduction techniques described in Panek et al. [22] with small modifications. Results of test runs with different initial quantities for So are shown in Table 10.2. The results show the computation times, the numbers of nodes visited to find the solution,... 

From the different planning methods available within SNP, SNP optimization is selected because it offers the best fit to the customer requirements outlined above. The main reasons for this decision are the multisourcing characteristics of the supply network as well as the fact that the objective functions used by the SNP optimizer, profit maximization or cost minimization, correspond to the planning philosophy favored by the customer. In addition to SNP optimization with its cost-based approach, SNP offers several heuristic-based planning methods which follow a rule-based logic. 

Cost-minimization analysis Dollars Assumed equal (not measured)... 

Table 12.1 summarizes five major types of pharmacoeconomic evaluations cost-consequence, cost-benefit, cost-effectiveness, cost-minimization, and cost-utility (Drummond et al., 1997 Kielhorn and Graf von der Schulenburg, 2000). In a cost-consequence analysis, a comprehensive list of relevant costs and outcomes (consequences) of alternative therapeutic approaches are presented in tabular form. Costs and outcomes are typically organized according to their relationship to cost (direct and indirect), quality of life, patient preferences, and clinical outcomes (see taxonomy below). No attempt is made to combine the costs and outcomes into an economic ratio, and the interpretation of the analysis is left in large part to the reader. 

In a cost-benefit analysis, both costs and consequences are valued in dollars and the ratio of cost to benefit (or more commonly benefit to cost) is computed. Cost-benefit analysis has been used for many years to assess the value of investing in a number of different opportunities, including investments (or expenditure) for health care services. Cost-effectiveness analysis attempts to overcome (or avoid) the difficulties in cost-benefit analysis of valuing health outcomes in dollars by using nonmonetary outcomes such as life-years saved or percentage change in biomarkers like serum cholesterol levels. Cost-minimization analysis is a special case of cost-effectiveness analysis in which the outcomes are considered to be identical or clinically equivalent. In this case, the analysis defaults to selecting the lowest-cost treatment alternative. Cost-utility analysis is another special case of cost-effectiveness analysis in which the value of the outcome is adjusted for differences in patients preferences (utilities) for the outcomes. Cost-utility analyses are most appropriate when quality of life is a very important consideration in the therapeutic decision. 

A common problem encountered in large chemical companies involves the distribution of a single product (30 manufactured at several plant locations. Generally, the product needs to be delivered to several customers located at various distances from each plant. It is, therefore, desirable to determine how much Y must be produced at each of m plants (Yv Y2,..., Ym) and how, for example, Ym should be allocated to each of n demand points (YmV Ym2,. Ymnl The cost-minimizing solution to this problem not only involves the transportation costs between each supply and demand point but also the production cost versus capacity curves for each plant. The individual plants probably vary with respect to their nominal production rate, and some plants may be more efficient than others, having been constructed at a later date. Both of these factors contribute to a unique functionality between production cost and production rate. Because of the particular distribution of transportation costs, it may be... 

Examine how jc varies with the different parameters in (d), and confirm that the trends are physically meaningful. Note that the heat transfer area A does not appear in Equation (d). Why Could you formulate/as a cost minimization problem, that is, the sum of the value of heat lost plus insulation cost Does it change the result for jc How do you use this result to select the correct commercial insulation size (see Example 1.1) ... 

Focus on supply cost minimization with supply volume decisions based on given demand Focus on turnover maximization with sales volume and price decisions based on given supply... 

Addressing the objective of profit maximization instead of cost minimization... 

However, the efficiency of actual biotechnological application depends on its design, process optimization, and cost minimization. Many failures have been reported on the way from bench laboratory-scale to field full-scale biotechnological treatment because of variability, instability, diversity, and heterogeneity of both microbial properties and conditions in the treatment system [10]. 

The economic objective in the model can either be represented as operating cost minimization or added-value maximization. In the case of added-value maximization, product prices are subtracted from the cost of feedstocks for each process. If PrCpet is the price of chemical cp, the added-value objective function can be represented as ... 

Reagents are chosen to minimize cost, minimize waste, and to maintain safe operations, among other considerations. Less hazardous reagents may be chosen in order to minimize... 

When it is assumed that the effectiveness of two therapies is equal, the effectiveness part of the cost-effectiveness ratio can be dropped from the analysis. In this situation, only the cost differences between the two therapies are examined. Usually this includes the cost of the drug, costs of administration, the treatment of side effects or adverse reactions and the incidence and prevalence of the condition. For example, Fenton et al. (1982) compared the costs of home versus hospital treatment of psychiatric patients when the outcomes of each were considered not to differ in any respect except that one requires a hospital stay and the other does not. The cost-minimization analysis simply looked at the differences in costs of the two treatments. The result is, not unexpectedly, that hospitalization was 64% more expensive than home-based treatment. 

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