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OPEX Concept
OPEX is the English acronym for
Operational Expenditure and that designates the amount of money used to
maintain in operation the capital goods of a company, namely the
equipments and facilities. So, OPEX is the cost continuously spent to
maintain the production of a product or service to keep a business or a
determined system running. As opposed, CAPEX,
refers to the cost of development or supply of own capital goods or non
consumable parts of the system, needed for the production and to
maintain the business or service running. For example, the purchase of a
machine is CAPEX, while the costs with its
maintenance are OPEX. OPEX can also include the cost with the employees
that work with the machine and others directly associated to its
operation such as the consumables.
Many times and due to different reasons,
companies find themselves in the need to switch
CAPEX by OPEX and vice versa. A way to reduce
CAPEX by counterpart of OPEX is the resource to outsourcing and the
renting of equipments and facilities. The most evident advantages of
this switch are the rise in cost flexibility and the reduction of
financing needs (that now are more diluted in time). A disadvantage can
be the costs raise.
Translated from Portuguese
by Susana Saraiva, Portuguese-English and English-Portuguese translation
specialist. Contact: spams@sapo.pt.
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