Cost Structure

The structure of operating costs of Turkish manufacturing firms between years 1995 and 2014 is tested in terms of their “rigidity” in this paper. Rigidity is defined as the proportion of fixed costs to variable costs in cost structures. Additionally, the effect of demand uncertainty as measured by the standard deviation of net sales on the cost structure of operating costs is also tested. Results support that higher levels of demand uncertainty are associated with higher portions of fixed costs in the cost structure.

The objective of this study is to examine the impact of economic crisis on cost structure configuration of companies. For this reason, an empirical study in the form of online survey has been carried out in 82 Greek manufacturing companies. We received data from two periods of great economic recession, namely during fall of 2013 and spring of 2015. Results indicated that companies most affected by the economic crisis, replaced fixed costs with variable ones. Cost structure configuration is the "tool" that companies used to limit the consequences of the crisis in their profitability.