Definition. The process of looking for, finding and removing unwarranted expenses from a business to increase profits without having a negative impact on product quality. Many business managers will engage in periodic cost reduction drives in order to make their company's operation more efficient and to boost profits.earby Terms. 1  cost proposal. 2  cost push facto... 3  cost push infla... 4  cost ratio. 5  cost realism. 6  cost realism an... 7  cost records. 8  cost recovery. 9  cost reduction. 10  cost reimbursem... 11  cost reimbursem... 12  cost risk. 13  cost saving. 14  cost sensitivit... 15  cost sharing. 16  cost sharing ag... 17  cost sharing co...