We say cash equivalentbecause noncash resources can be exchanged for the desired goods or services.For example, equipment may be traded for materials used in production. Cost can
be thought of as a dollar measure of the resources used to achieve a given benefit.Minimizing the cost required to achieve the benefit means that a firm is becoming more efficient. However, costs must be managed strategically. For example, managers should have the objective of providing the same (or greater) customer value for a lower cost than their competitors. In this way, the strategic position of the firm is increased, and a competitive advantage created.