Cost efficiency is improving speed, quality, and effectiveness in producing a product or a service to reduce production costs. The difference between the total input costs in comparison to the returns from the output calculates it.

Cost efficiencies are business strategies that strive to reduce the cost of creating a product or performing an activity without compromising quality. Determining cost efficiencies requires comparing the benefits of the output to the costs of the input.

Cost efficiency can be defined as the ratio of outputs achieved to the inputs used in a particular process or operation. It is an essential metric for businesses to monitor and improve upon. By analyzing the cost efficiency of different processes and operations, companies can identify areas of improvement and implement strategies to reduce costs.