Normalized Cost per Answer
Definition
Answer costs are made comparable under uniform conditions.
The metric relates defined total costs to a clearly specified number of answers. For fair comparisons, task mix, quality, period, and included costs must match.
Simply explained
Not the cheapest single call counts, but the price for a usable result.
Why it matters in practice
This allows models and workflows to be compared economically.
Example from business
Hypothetical example: 100 euros total costs for 200 accepted answers result in 0.50 euros per accepted answer.
Limits and pitfalls
- Without a common definition, normalization is arbitrary. Repetitions, tools, and human review can increase costs.
Origin & history
The term transfers unit cost accounting to AI answers; a universal formula is not defined.
Use in mid-sized companies
- SMEs can jointly evaluate their own quality and cost limits.
Frequently asked questions
Are token costs alone sufficient?
No, they often represent only part of the effort.
Sources
- Unit Economics — · FinOps Foundation: Unit Economics —
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