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In microeconomics, economies of scale are the cost advantages that enterprises obtain due to their scale of operation, and are typically measured by the amount of output produced per unit of time. A decrease in cost per unit of output enables an increase in scale. At the basis of economies of scale, there may be technical, statistical, organizational or related factors to the degree of market control. This is just a partial description of the concept.
The following outline is provided as an overview of and topical guide to industrial organization:
Efficiency is the often measurable ability to avoid wasting materials, energy, efforts, money, and time while performing a task. In a more general sense, it is the ability to do things well, successfully, and without waste.
In accounting and economics, 'fixed costs', also known as indirect costs or overhead costs, are business expenses that are not dependent on the level of goods or services produced by the business. They tend to be recurring, such as interest or rents being paid per month. These costs also tend to be capital costs. This is in contrast to variable costs, which are volume-related and unknown at the beginning of the accounting year. Fixed costs have an effect on the nature of certain variable costs.
In economics, total-factor productivity (TFP), also called multi-factor productivity, is usually measured as the ratio of aggregate output to aggregate inputs. Under some simplifying assumptions about the production technology, growth in TFP becomes the portion of growth in output not explained by growth in traditionally measured inputs of labour and capital used in production. TFP is calculated by dividing output by the weighted geometric average of labour and capital input, with the standard weighting of 0.7 for labour and 0.3 for capital. Total factor productivity is a measure of productive efficiency in that it measures how much output can be produced from a certain amount of inputs. It accounts for part of the differences in cross-country per-capita income. For relatively small percentage changes, the rate of TFP growth can be estimated by subtracting growth rates of labor and capital inputs from the growth rate of output.
In economics, the Baumol effect, also known as Baumol's cost disease, is the rise of wages in jobs that have experienced little or no increase in labor productivity, in response to rising salaries in other jobs that have experienced higher productivity growth. The phenomenon was described by William J. Baumol and William G. Bowen in the 1960s and is an example of cross elasticity of demand.
A cost estimate is the approximation of the cost of a program, project, or operation. The cost estimate is the product of the cost estimating process. The cost estimate has a single total value and may have identifiable component values.
Indirect costs are costs that are not directly accountable to a cost object. Like direct costs, indirect costs may be either fixed or variable. Indirect costs include administration, personnel and security costs. These are those costs which are not directly related to production. Some indirect costs may be overhead, but other overhead costs can be directly attributed to a project and are direct costs.
Programming productivity describes the degree of the ability of individual programmers or development teams to build and evolve software systems. Productivity traditionally refers to the ratio between the quantity of software produced and the cost spent for it. Here the delicacy lies in finding a reasonable way to define software quantity.
Cost engineering is "the engineering practice devoted to the management of project cost, involving such activities as estimating, cost control, cost forecasting, investment appraisal and risk analysis". "Cost Engineers budget, plan and monitor investment projects. They seek the optimum balance between cost, quality and time requirements."
When estimating the cost for a project, product or other item or investment, there is always uncertainty as to the precise content of all items in the estimate, how work will be performed, what work conditions will be like when the project is executed and so on. These uncertainties are risks to the project. Some refer to these risks as "known-unknowns" because the estimator is aware of them, and based on past experience, can even estimate their probable costs. The estimated costs of the known-unknowns is referred to by cost estimators as cost contingency.
A glossary of terms relating to project management and consulting.
Construction cost estimating software is computer software designed for contractors to estimate construction costs for a specific project. A cost estimator will typically use estimating software to estimate their bid price for a project, which will ultimately become part of a resulting construction contract. Some architects, engineers, construction managers, and others may also use cost estimating software to prepare cost estimates for purposes other than bidding such as budgeting and insurance claims.
Direct costs are costs which are directly accountable to a cost object. Direct cost is the nomenclature used in accounting. The equivalent nomenclature in economics is specific cost. By contrast, a joint cost is a cost incurred in the production or delivery of multiple products or product lines. For instance, in civil aviation, substantial costs of a flight are a joint cost between carrying passengers and carrying freight, and underlie economies of scope across passenger and freight services. By contrast, some costs are specific to the services, for instance, meals and flight attendants are specific costs of carrying passengers.
In economics, a factor market is a market where factors of production are bought and sold. Factor markets allocate factors of production, including land, labour and capital, and distribute income to the owners of productive resources, such as wages, rents, etc.
In economics, the marginal product of labor (MPL) is the change in output that results from employing an added unit of labor. It is a feature of the production function and depends on the amounts of physical capital and labor already in use.
Chemical plant cost indexes are dimensionless numbers employed to updating capital cost required to erect a chemical plant from a past date to a later time, following changes in the value of money due to inflation and deflation. Since, at any given time, the number of chemical plants is insufficient to use in a preliminary or predesign estimate, cost indexes are handy for a series of management purposes, like long-range planning, budgeting and escalating or de-escalating contract costs.
Socially necessary labour time in Marx's critique of political economy is what regulates the exchange value of commodities in trade and consequently constrains producers in their attempt to economise on labour. It does not 'guide' them, as it can only be determined after the event and is thus inaccessible to forward planning.
In Marxian economics, surplus value is the difference between the amount raised through a sale of a product and the amount it cost to manufacture it: i.e. the amount raised through sale of the product minus the cost of the materials, plant and labour power. The concept originated in Ricardian socialism, with the term "surplus value" itself being coined by William Thompson in 1824; however, it was not consistently distinguished from the related concepts of surplus labor and surplus product. The concept was subsequently developed and popularized by Karl Marx. Marx's formulation is the standard sense and the primary basis for further developments, though how much of Marx's concept is original and distinct from the Ricardian concept is disputed. Marx's term is the German word "Mehrwert", which simply means value added, and is cognate to English "more worth".
A construction contract is a mutual or legally binding agreement between two parties based on policies and conditions recorded in document form. The two parties involved are one or more property owners and one or more contractors. The owner, often referred to as the 'employer' or the 'client', has full authority to decide what type of contract should be used for a specific development to be constructed and to set out the legally-binding terms and conditions in a contractual agreement. A construction contract is an important document as it outlines the scope of work, risks, duration, duties, deliverables and legal rights of both the contractor and the owner.
References
- 1 2 10s-90 Cost Engineering Terminology. AACE International. 2010. p. 5.
- ↑ Standard Estimating Practice Sixth Edition Americal Society of Professional Estimators. BNI Building News. 2004. pp. 121–134. ISBN 1-55701-481-7.
- ↑ Waier, Philip (2013). Building Construction Cost Data (71st annual ed.). RSMeans. p. 730. ISBN 978-1-936335-56-5.
- ↑ Standard Estimating Practice Sixth Edition Americal Society of Professional Estimators. BNI Building News. 2004. p. 23. ISBN 1-55701-481-7.
- ↑ Jelen & Black (1983). Cost and Optimization Engineering Second Edition. McGraw-Hill Book Company. p. 334. ISBN 0-07-032331-3.
- ↑ Waier, Philip (2013). Building Construction Cost Data (71st annual ed.). RSMeans. p. 729. ISBN 978-1-936335-56-5.
- 1 2 Philip R. Waier; et al. (2012). Building Construction Cost Data (70th annual ed.). RSMeans. p. vii. ISBN 978-1-936335-29-9.
- ↑ 10s-90 Cost Engineering Terminology. AACE International. 2010. p. 27.
- ↑ 10s-90 Cost Engineering Terminology. AACE International. 2010. p. 36.
- ↑ MasterFormat 2010 Update Master List of Numbers and Titles for the Construction Industry. The construction Specifications Institute, Construction Specifications Canada. 2010. pp. 43–61. ISBN 978-0-9845357-0-5.
- ↑ 10s-90 Cost Engineering Terminology. AACE International. 2010. p. 59.
- ↑ 10s-90 Cost Engineering Terminology. AACE International. 2010. p. 75.
- ↑ 10s-90 Cost Engineering Terminology. AACE International. 2010. p. 76.
- ↑ Waier, Philip (2013). Building Construction Cost Data (71st annual ed.). RSMeans. p. 5. ISBN 978-1-936335-56-5.
- ↑ 10s-90 Cost Engineering Terminology. AACE International. 2010. p. 53.
- ↑ Project Management Institute (2004). A Guide to the Project Management Body of Knowledge: PMBOK Guide (3rd ed.). Newtown Square, Pennsylvania: Project Management Institute. p. 5.