Terms to Learn

This chapter and the Glossary at the end of the text contain definitions of the following important terms:

  1. book value
  2. business function costs
  3. constraint
  4. decision model
  5. differential cost
  6. differential revenue
  7. full costs of the product
  8. incremental cost
  9. incremental revenue
  10. insourcing
  11. linear programming (LP)
  12. make-or-buy decisions
  13. objective function
  14. one-time-only special order
  15. opportunity cost
  16. outsourcing
  17. product-mix decisions
  18. qualitative factors
  19. quantitative factors
  20. relevant costs
  21. relevant revenues
  22. sunk costs
  23. theory of constraints (TOC)
  24. throughput margin