Price vs Cost
You don’t need to be a genius to understand the price of something. This is merely the dollars you are paying. When we evaluate Price vs Cost, this gives you the true total cost, which incorporates both the price, the economic cost, and thus you are able to make the best possible financial decision.
Brilliance lies in recognizing that the true cost of something extends far beyond its initial price.
What is Economic Cost?
Economic cost is the total cost of a decision when you consider both direct expenses and the value of the next best alternative you give up.
What is cost?
Cost refers to the total amount you pay for something. It includes both the financial expense and the economic cost.
How is cost different from price?
It’s important to change your vehicle’s oil according to the industry standard—every 3 months or 3,000 miles. While an oil change comes with a cost, it’s a small price to pay compared to the expense of replacing your engine if you neglect this essential maintenance.
So why do you spend the $ to change your vehicle’s oil, since it costs you money?
Clearly, changing your oil is essential because neglecting it will significantly shorten your engine’s lifespan.
Ever priced out an engine rebuild/replacement?
They cost thousands of dollars and require several days to weeks of downtime without your vehicle, which you depend on daily for every aspect of your life.
The price of the oil change is the amount you pay in dollars.
The cost of skipping an oil change includes the expense of a new or rebuilt engine and the inconvenience of being without your vehicle. Additionally, it leads to lost opportunities and disruptions in your daily life. This is known as Opportunity Cost—real, measurable, and quantifiable.
The Price vs Cost evaluation is the $50 oil change price vs the ~$6k replacement engine cost. Clearly it is easier to come up with and let go of $50 than it is ~$6k. This demonstrates the value of the Oil Change is ~$6k for the bargain price of $50!
So why is an IT guy writing about oil changes?
The theme is clearly maintenance. We don’t neglect the things we depend on because we enjoy wasting money on frivolous expenses. In fact, the opposite is true. Experience shows that maintaining what we rely on is far more cost-effective, reduces stress and heartache, and enables us to seize every opportunity life presents!
Partnering with a professional IT company dedicated to your organization’s success is essential to preventing critical threats that could hinder your mission. Such a company is easy to recognize—they focus on proactive, comprehensive maintenance and robust security for your entire network.
At 24×7 Protect IT, we are dedicated to safeguarding our clients’ networks, maintaining their security, and ensuring optimal performance at all times. We protect their networks from disasters through comprehensive contingency plans that enable us to respond swiftly, effectively, and efficiently to restore security whenever an incident occurs.
In the words of the wise Benjamin Franklin, “If you fail to plan, you plan to fail”.
Contact us today at (678) 606-0018 and discover how 24×7 Protect IT, Inc. can secure, stabilize, maintain, and safeguard your network against all current and emerging threats.
Paul J. Chrisco
Information Technology Professional
