Price–performance ratio - Wikipedia

In economics and engineering, the price–performance ratio refers to a product's ability to deliver performance, of any sort, for its price. Price–performanceratio FromWikipedia,thefreeencyclopedia Jumptonavigation Jumptosearch quotientofaproduct'sperformancedeliverybyitscost Ineconomicsandengineering,theprice–performanceratioreferstoaproduct'sabilitytodeliverperformance,ofanysort,foritsprice.Generallyspeaking,productswithalowerprice/performanceratioaremoredesirable,excludingotherfactors. Price–performanceisoftenwrittenascost–performanceorcost–benefit.Eventhoughthistermwouldseemtobeastraightforwardratio,whenpriceperformanceisimproved,better,orincreased,itactuallyreferstotheperformancedividedbytheprice,inotherwordsexactlytheoppositeratio(i.e.aninverseratio)torankaproductashavinganincreasedprice/performance. Contents 1Backgroundofappearance 2Examples 2.1Consumerandmedicalproducts 2.2Businessworld 2.3Computertechnology 3Seealso 4References Backgroundofappearance[edit] Duetotheprolongedlowgrowthandeconomicslump,theproportionofconsumptiontoincomewillinevitablydecrease.However,theycannotcompletelygiveuptheirconsumption,sotheyhavefoundwaystomaintainasimilarlevelofconsumptionataminimumcost.[1] Examples[edit] Consumerandmedicalproducts[edit] AccordingtofuturistRaymondKurzweil,productsstartoutashighlyineffectiveandhighlyexpensive.[2] Gradually,productsbecomemoreeffectiveandcheaperuntiltheyarehighlyeffectiveandalmostfreetobuy.[2]SomeoftheproductsthathavefollowedthisexampleincludeAIDSmedications(whicharenowaffordabletothemajorityofAIDSsufferers[which?]),text-to-speechprograms,anddigitalcameras.[2]However,productsthatrelyprimarilyonpaper(e.g.,newspapersandtoiletpaper)and/orfossilfuels(e.g.,electricityinmostcountriesandpetroleumgasolineforautomobiles)haveonlyincreasedinprice. Thisdirectlycontradictsthetrendofelectronicgadgetslikenetbooks,desktopcomputers,andlaptopcomputersthatalsohavebeendecreasinginprice.However,theprevailinginflationrateofacountryorprovince/statemaynegatetheplummetingcostsofsoftware,AIDSmedications,and/ordigitalcamerasincertainregionsalongwithcertaingovernmentalpolicies.Thishastheeffectofkeepingcostshighincertainareaswhiletheyaredramaticallyreducedinothers. Intheory,thismeansthattherichpeoplehaveearlieraccesstohighlyinefficienttechnologies,medicaltreatments,andtherapies(thatareprototypicalinnature)whilethepoorgetaccesstothesesameproductswhentheybecomemoreefficientandeasiertomanufactureseveralyearsdowntheroad.[2] Businessworld[edit] Duringthelatter1990s,thecost–performanceratiosofthelargermainframesystemsfelltremendouslyincomparisontoanumberofsmallermicrocomputershandlingthesameload.Asaresult,manyoftheoldercomputercompanieswereshutdownandpeoplewereputoutofwork.However,mostofthemwereabletobere-hiredatthenewercorporationsafterundergoingaseriesofre-traininginvolvingthenewertechnologies. Inthebusinessworld,thereisusuallyavalueassociatedwithatypicalcost–performanceratioanalysis.Thisvaluecaneitherbepositive,neutral,ornegativedependingontheamountofmoneyspentversustheresultsachievedbythespendingoftheavailablecapital.Acost-performanceratiowithapositivevalue(i.e.greaterthan1)indicatesthatcostsarerunningunderbudget.[3]Anegativevalue(i.e.lessthan1)indicatesthatcostsarerunningoverbudget.[3]However,aneutralcost-performanceratio(between1.0and1.9)couldsuggestacertaindegreeofstagnationinthebudget.Businesstripscanalsobefactoredintothecost–performanceratiobecausespending$50todoajourneyspanning100miles(160 km)intwohoursisabettercost–performanceratiothanspending$105todothejourneyinonehour. Computertechnology[edit] Thetermtendstobeusedquiteabitwhencomparingcomputerhardware.Duringthelatter1990s,theprice–performanceratiosofmidrangeandlargemainframesystemsfelltremendouslyincomparisontoanumberofsmallermicrocomputershandlingthesameload.Manycompanieswereforcedoutoftheindustryasthishappened,includingDEC,DataGeneralandmanymultiprocessorvendorssuchasSequentComputerSystemsandPyramidTechnology. Seealso[edit] Benefit–costratio References[edit] ^정훈,박(2016-02-17)."[가성비의경제학]가성비,그'슬픈'경제학적배경".m.econovill.com(inKorean).Retrieved2020-05-22. ^abcdKurzweil,Raymond(2005).TheSingularityisNear.PenguinBooks.ISBN 0-14-303788-9. ^ab"Cost–performanceratioindicator".MaxWideman.Retrieved2010-08-26. Retrievedfrom"https://en.wikipedia.org/w/index.php?title=Price–performance_ratio&oldid=1006250457" Categories:ProductioneconomicsEngineeringratiosHiddencategories:CS1Korean-languagesources(ko)UseAmericanEnglishfromApril2019AllWikipediaarticleswritteninAmericanEnglishArticleswithshortdescriptionShortdescriptionmatchesWikidataAllarticleswithspecificallymarkedweasel-wordedphrasesArticleswithspecificallymarkedweasel-wordedphrasesfromSeptember2014 Navigationmenu Personaltools NotloggedinTalkContributionsCreateaccountLogin Namespaces ArticleTalk Variants expanded collapsed Views ReadEditViewhistory More expanded collapsed Search Navigation MainpageContentsCurrenteventsRandomarticleAboutWikipediaContactusDonate Contribute HelpLearntoeditCommunityportalRecentchangesUploadfile Tools WhatlinkshereRelatedchangesUploadfileSpecialpagesPermanentlinkPageinformationCitethispageWikidataitem Print/export DownloadasPDFPrintableversion Languages ČeštinaDeutsch한국어日本語РусскийTürkçe中文 Editlinks