A company's application is deployed on Amazon EC2 instances and uses AWS Lambda functions for...

Compute Savings Plansoffer the most flexible and cost-effective solution for the production instances, as they provide significant savings (up to 66%) for both EC2 and AWS Lambda usage, while allowing flexibility in the type of instance family, size, and even region. For nonproduction instances, usingOn-Demand Instancesensures you only pay for the instances when they are running, and shutting them down during off-hours further optimizes cost.

Key AWS features:

Compute Savings Plans: Provide savings based on consistent usage, making it ideal for production environments with steady load.

On-Demand Instances: Suitable for nonproduction environments that are used intermittently. Shutting them down when not in use avoids unnecessary costs.

AWS Documentation: According to AWS's cost optimization best practices, using a combination of Savings Plans for production and On-Demand Instances for nonproduction environments that are used sparingly results in optimal cost savings​​.