Define numerator, denominator, and period
The indicator is comparable only when the team agrees on the cost in the numerator, the throughput in the denominator, and the dates covered by each. Production, consumption, and inventory should reconcile to the same cutoff.
Agree on included costs and events
Scope may include different elements depending on the decision: consumed product, logistics, handling, downtime, or other business-validated items. State inclusions and exclusions before making a comparison.
- Included cost lines and currency
- Inventory and event treatment
Normalize throughput, currency, and comparable conditions
Currency, exchange rate, units, and throughput basis should remain explicit. Record changes in ore, throughput, availability, or operating strategy that prevent a direct comparison.
Interpret the indicator alongside stability and performance
A lower unit cost does not by itself describe decision quality. Read it alongside stability, throughput, equipment condition, consumption, and the agreed objective to avoid shifting cost elsewhere in the process.