Reference Work Entry

CIRP Encyclopedia of Production Engineering

pp 289-294

Date:

Cost

  • Sotiris MakrisAffiliated withLaboratory for Manufacturing Systems and Automation (LMS), Department of Mechanical Engineering and Aeronautics, University of Patras Email author 
  • , George MichalosAffiliated withLaboratory for Manufacturing Systems and Automation (LMS), Department of Mechanical Engineering and Aeronautics, University of Patras
  • , George ChryssolourisAffiliated withLaboratory for Manufacturing Systems and Automation (LMS), Department of Mechanical Engineering and Aeronautics, University of Patras

Synonyms

Charge; Disbursement; Expenditure; Expense; Monetary value; Price

Definition

Cost is the amount, measured in money, of cash expended or other property transferred, capital stock issued, services performed, or a liability incurred, in consideration of goods or services received or to be received (Belkaoui 1985).

However, there is no definition that can give the exact meaning of the term “cost” since its interpretation would depend upon the nature of the business or industry and the context in which it is used. The use of the term “cost” without qualification may be misleading. Different costs are found for different purposes.

Theory and Application

Cost together with flexibility, time, and quality are the main manufacturing attributes that need to be considered during the manufacturing system design and operation (Chryssolouris 2006). In order for manufacturers to evaluate the effectiveness of their facilities and formulate their strategies and ...

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