How do you optimize a RAG or agent system for cost and latency in production?

RAG and agents get expensive and slow fast: retrieval plus reranking plus big-model calls, multiplied across agent steps. The signal is naming the dominant cost first, then the levers that actually move it. Here is the playbook.

Updated Aug 2026 · Grounded in real Applied AI Engineer interview loops and written to a senior-engineer editorial bar.