Avoided Cost Calculator

✖Assumed Repair Cost is an estimated or projected expense associated with repairing or restoring an asset, equipment, or property.ⓘ Assumed Repair Cost [ARC]			+10% -10%
✖Production Losses refer to disruptions or reductions in the output of goods or services caused by various factors, resulting in a decrease in productivity or efficiency.ⓘ Production Losses [PL]			+10% -10%
✖Preventative Maintenance Cost refers to the expenses associated with planned and proactive maintenance activities aimed at preventing equipment failures.ⓘ Preventative Maintenance Cost [PMCT]			+10% -10%

✖Avoided Costs refer to expenses or expenditures that a company can prevent or eliminate by taking specific actions.ⓘ Avoided Cost [ACS]

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Formula

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Avoided Cost

Formula

ACS = ARC + PL - PMCT

Example

865 = 980 + 470 - 585

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Avoided Cost Solution

STEP 0: Pre-Calculation Summary

Formula Used

Avoided Costs = Assumed Repair Cost+Production Losses-Preventative Maintenance Cost
ACS = ARC+PL-PMCT
This formula uses 4 Variables

Variables Used

Avoided Costs - Avoided Costs refer to expenses or expenditures that a company can prevent or eliminate by taking specific actions.
Assumed Repair Cost - Assumed Repair Cost is an estimated or projected expense associated with repairing or restoring an asset, equipment, or property.
Production Losses - Production Losses refer to disruptions or reductions in the output of goods or services caused by various factors, resulting in a decrease in productivity or efficiency.
Preventative Maintenance Cost - Preventative Maintenance Cost refers to the expenses associated with planned and proactive maintenance activities aimed at preventing equipment failures.

STEP 1: Convert Input(s) to Base Unit

Assumed Repair Cost: 980 --> No Conversion Required
Production Losses: 470 --> No Conversion Required
Preventative Maintenance Cost: 585 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

ACS = ARC+PL-PMCT --> 980+470-585

Evaluating ... ...

ACS = 865

STEP 3: Convert Result to Output's Unit

865 --> No Conversion Required

FINAL ANSWER

865 <-- Avoided Costs

(Calculation completed in 00.004 seconds)

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Created by Aashna

IGNOU (IGNOU), India

Aashna has created this Calculator and 100+ more calculators!

Verified by Surjojoti Som

Rashtreeya Vidyalaya College of Engineering (RVCE), Bangalore

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Avoided Cost Formula

Avoided Costs = Assumed Repair Cost+Production Losses-Preventative Maintenance Cost
ACS = ARC+PL-PMCT

What is Avoided Cost ?

Avoided Cost represents the savings or benefits realized by avoiding certain expenditures or negative outcomes. Avoided cost refers to the financial savings or benefits resulting from proactive measures or decisions that prevent or reduce the occurrence of undesirable events or expenses. Avoided costs are typically calculated by estimating the expenses or losses that would have occurred in the absence of the action taken. The difference between the actual costs incurred after taking action and the estimated costs without taking action represents the avoided cost. In summary, avoided costs evaluate the positive financial impact of proactive measures or decisions that prevent or mitigate potential expenses or losses. Identifying and quantifying avoided costs can inform decision-making and resource allocation. It helps prioritize investments and initiatives and is an essential consideration in cost-benefit analysis, risk management, and strategic planning for businesses and organizations.

How to Calculate Avoided Cost?

Avoided Cost calculator uses Avoided Costs = Assumed Repair Cost+Production Losses-Preventative Maintenance Cost to calculate the Avoided Costs, Avoided Cost is a term commonly used in economics, finance, and business to describe the expenses or losses that are prevented or mitigated by taking a particular action. Avoided Costs is denoted by ACS symbol.

How to calculate Avoided Cost using this online calculator? To use this online calculator for Avoided Cost, enter Assumed Repair Cost (ARC), Production Losses (PL) & Preventative Maintenance Cost (PMCT) and hit the calculate button. Here is how the Avoided Cost calculation can be explained with given input values -> 865 = 980+470-585.

FAQ

What is Avoided Cost?

Avoided Cost is a term commonly used in economics, finance, and business to describe the expenses or losses that are prevented or mitigated by taking a particular action and is represented as ACS = ARC+PL-PMCT or Avoided Costs = Assumed Repair Cost+Production Losses-Preventative Maintenance Cost. Assumed Repair Cost is an estimated or projected expense associated with repairing or restoring an asset, equipment, or property, Production Losses refer to disruptions or reductions in the output of goods or services caused by various factors, resulting in a decrease in productivity or efficiency & Preventative Maintenance Cost refers to the expenses associated with planned and proactive maintenance activities aimed at preventing equipment failures.

How to calculate Avoided Cost?

Avoided Cost is a term commonly used in economics, finance, and business to describe the expenses or losses that are prevented or mitigated by taking a particular action is calculated using Avoided Costs = Assumed Repair Cost+Production Losses-Preventative Maintenance Cost. To calculate Avoided Cost, you need Assumed Repair Cost (ARC), Production Losses (PL) & Preventative Maintenance Cost (PMCT). With our tool, you need to enter the respective value for Assumed Repair Cost, Production Losses & Preventative Maintenance Cost and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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