Long Run Incremental Cost


Also found in: Acronyms.

Long Run Incremental Cost

A foreseen, future change in the incremental cost to a company, which is the cost of a company producing one more unit of a product. Long run incremental costs are likely changes to the inputs of making a product, such as the cost of raw materials. For example, if making a product requires a significant amount of oil, and oil prices are thought to be likely to decline, the long run incremental cost is also likely to decline. While there is no guarantee that the long run incremental cost will change in the exact amount expected, attempting to calculate it helps a company make future investment decisions.
References in periodicals archive ?
Forward looking long run incremental cost means selecting the best network technology and an optimal network design without considering historical costs or an already existing network (2).
The paper proposes a model for the bottom-up broadband access network configuration, a service classification for considering the service integration inside the network and a cost model for the forward looking long run incremental cost approach.
The implementation of the forward looking long run incremental cost standard in a bottom-up model requires a detailed knowledge of an efficient network configuration and the traffic load on it.
However, NTT DoCoMo, does not have to submit to long run incremental cost calculation (LRIC)by the MPHPT to determine its interconnection charges.