Equation 19 · Part 1 · AI Inference Economics in Practice: An Advanced Technical Guide

Symbol c_od

c_{\mathrm{od}}

c_{\mathrm{od}}

What this part means

the effective on-demand cost of the equivalent work.

Its job in the formula

$c_o$ d is a part of this expression. Its role is fixed by the surrounding article and by the operations shown in the formula.

Full expressionSymbol c_odArticle meaning

Where the article explains it

Let $P_r$ be the reserved capacity’s price per hour, $Q_{\max}$ the maximum throughput it sustains per hour at full utilization, and $c_{\mathrm{od}}$ the effective on-demand cost of the equivalent work.

The passage around this formula

This is where the earlier levers become procurement inputs rather than separate decisions. A caching strategy that lifts realized hit rate lowers $c_{\mathrm{od}}$ , which raises the utilization bar $u^*$ a reservation has to clear — a workload with an excellent hit rate needs steadier , not just larger , volume to justify reserving, because caching already captured much of the available saving on-demand. A routing policy shrinking the volume on…

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Learn the underlying idea

A subscript is a label attached below a symbol. It often selects a time step, component, category, or member of a sequence.

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Sources cited in the article section

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