| Cost Driver | Example of Use | Cost Impact | |-------------|----------------|--------------| | | Processing a loan application, claims form, or invoice | Data entry, document storage, postage | | Number of customer calls | Call center handling tech support | Staff salaries, phone system costs, training | | Minutes on call | Billing a client for legal or consulting advice | Professional time, recording storage | | Number of employees | HR department activities (payroll, benefits admin) | HR software licenses, recruitment fees | | Square footage | Rent, cleaning, security for an office floor | Facility overhead | | Number of software users | Licensing an accounting or CRM system | Per-seat software fees | | Number of support tickets | IT helpdesk resolving password resets | Helpdesk staffing, ticketing system cost | Real example: A law firm uses billable hours (a cost driver) to allocate secretarial and paralegal costs to each client case. 3. Logistics & Distribution Cost Drivers These apply to warehouses, shipping, and freight.
| Cost Driver | Example of Use | Cost Impact | |-------------|----------------|--------------| | | Picking and packing items for shipment | Packing materials, order picker labor | | Number of line items | Each different SKU in an order (affects complexity) | Sorting time, conveyor belt usage | | Weight or volume | Shipping freight by air or sea | Fuel, carrier fees, handling equipment wear | | Distance traveled | Truck delivery routes | Driver wages, tire wear, fuel | | Number of stops | Last-mile delivery to 50 different addresses vs. 1 warehouse | Idling time, driver route optimization software | | Pallet positions | Storage in a warehouse (rack space) | Rent of warehouse, forklift fuel | | Number of receipts | Unloading and inspecting incoming goods | Receiving dock labor, forklift time | Real example: Amazon allocates warehouse labor costs using number of picks (each time a worker takes an item from a shelf). 4. Healthcare Cost Drivers Hospitals, clinics, and labs use these to track costs per patient. example of cost driver
| Cost Driver | Example of Use | |-------------|----------------| | | Hospital room, meals, laundry, nursing rounds | | Number of lab tests | Blood work, urinalysis, pathology slides | | Number of images | X-rays, MRIs, CT scans (affects radiologist time and film/storage) | | Minutes in surgery | Operating room time, anesthesiologist fees, sterilization | | Number of prescriptions | Pharmacy dispensing cost, bottle labels, pharmacist check | | Number of visits | Outpatient clinic overhead (front desk, waiting room) | Real example: A hospital uses patient days to allocate housekeeping costs. A 5-day stay pays 5× more than a 1-day stay. 5. Software & IT Cost Drivers For SaaS companies, internal IT, and cloud computing. | Cost Driver | Example of Use |