Background Note | HBS Case Collection | November 1991 (Revised August 1994)

Relevant Costs and Revenues

by Arthur Schleifer Jr.

Abstract

Develops the idea that the relevance of costs and revenues depends on what decisions are under consideration. Revenues and costs are relevant if they would be different under one decision choice than under the other. Teaching purpose: Basic background material for decision making under certainty and under uncertainty. Provides a framework under which a variety of costs and revenues, resulting from substitution, complementarity, capacity, etc., can be identified as relevant.

Keywords: Decision Choices and Conditions; Cost; Revenue; Framework; Managerial Roles; Risk and Uncertainty;

Citation:

Schleifer, Arthur, Jr. "Relevant Costs and Revenues." Harvard Business School Background Note 892-010, November 1991. (Revised August 1994.)