Browse MBAs SECTION 7: Operations & Supply Chain Management

The Total Cost of Ownership Analyzer

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The Total Cost of Ownership Analyzer

Calculate the true total cost of ownership for this purchase/decision.

The item or decision: [DESCRIBE]
Purchase price / headline cost: [AMOUNT]
Other costs over its life: [INSTALLATION, TRAINING, MAINTENANCE, ENERGY,
DOWNTIME, DISPOSAL, SWITCHING]
Time horizon: [YEARS]

Provide:
1. The full cost over the life, not just the purchase price
2. A comparison of options on TCO, not sticker price
3. The hidden and recurring costs people usually forget
4. Where a higher upfront cost pays back through lower running costs
5. A recommendation on a TCO basis with the key assumptions

Show how the cheapest option to buy can be the most expensive to own.

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