Cost Driver

A description of the structural sources which influence the nature and level of costs incurred by business activity. For example, if we used to buy from two domestic sources and we now single-source from overseas, there are at least two cost drivers at play: the scale of our purchase and the distance over which the goods are shipped. Cost drivers are related to the value chain. Typical cost drivers include economies of scale, learning, supply chain linkages, vertical integration, location etc. See also Costing, Activity Based.

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Discover the world’s largest Glossary of Procurement terms

With over 800 Procurement specific terms (and growing) you will find everything you need to know or thought you knew about the Procurement function. Our aim is to provide you with a comprehensive list collated from the Comprara Groups hub of training and consulting source materials.The Procurement Glossary has been compiled by industry expert Paul Rogers.