Definition of Cost avoidance:
Action taken to reduce future costs, such as replacing parts before they fail and cause damage to other parts. Cost avoidance may incur higher (or additional) costs in the shortrun but the final or life cycle cost would be lower.
How to use Cost avoidance in a sentence?
- The automotive industry utilized cost avoidance by routinely replacing parts on the production line, this strategy prevented stops in production in which one stop could affect multiple areas of car production.
- We had a cost avoidance strategy and that is why we replaced the tires now to reduce the cost in the future.
- John worked in a factory that was negatively effected by the economic turn down. As a result John was asked t participate in a project focused on cost avoidance in the manufacturing process.
Meaning of Cost avoidance & Cost avoidance Definition