Total Cost of Ownership

Topics: Management, Risk, Costs Pages: 7 (1786 words) Published: January 27, 2014
What is TCO?
Total Cost of Ownership includes all the costs of a system over its life:
(Acquisition, installation, operation, maintenance, risk management, disposal.) Why do we use TCO instead of the upfront cost to acquire the good?
Sometimes the big cost of a good isn’t just the upfront cost of the good. Imagine a house or car. Sure a car costs 30k, but don’t forget insurance, repairs, maintenance, gas, etc. TCO takes these things into account Quick review: npv=future amt/(1+i)^t

I=discount rate
T=number of time periods
What is TCO?
Total Cost of Ownership includes all the costs of a system over its life:
(Acquisition, installation, operation, maintenance, risk management, disposal.) Why do we use TCO instead of the upfront cost to acquire the good?
Sometimes the big cost of a good isn’t just the upfront cost of the good. Imagine a house or car. Sure a car costs 30k, but don’t forget insurance, repairs, maintenance, gas, etc. TCO takes these things into account Quick review: npv=future amt/(1+i)^t

I=discount rate
T=number of time periods
What is TCO?
Total Cost of Ownership includes all the costs of a system over its life:
(Acquisition, installation, operation, maintenance, risk management, disposal.) Why do we use TCO instead of the upfront cost to acquire the good?
Sometimes the big cost of a good isn’t just the upfront cost of the good. Imagine a house or car. Sure a car costs 30k, but don’t forget insurance, repairs, maintenance, gas, etc. TCO takes these things into account Quick review: npv=future amt/(1+i)^t

I=discount rate
T=number of time periods
What is TCO?
Total Cost of Ownership includes all the costs of a system over its life:
(Acquisition, installation, operation, maintenance, risk management, disposal.) Why do we use TCO instead of the upfront cost to acquire the good?
Sometimes the big cost of a good isn’t just the upfront cost of the good. Imagine a house or car. Sure a car costs 30k, but don’t forget insurance, repairs, maintenance, gas, etc. TCO takes these things into account Quick review: npv=future amt/(1+i)^t

I=discount rate
T=number of time periods
What is TCO?
Total Cost of Ownership includes all the costs of a system over its life:
(Acquisition, installation, operation, maintenance, risk management, disposal.) Why do we use TCO instead of the upfront cost to acquire the good?
Sometimes the big cost of a good isn’t just the upfront cost of the good. Imagine a house or car. Sure a car costs 30k, but don’t forget insurance, repairs, maintenance, gas, etc. TCO takes these things into account Quick review: npv=future amt/(1+i)^t

I=discount rate
T=number of time periods
What is TCO?
Total Cost of Ownership includes all the costs of a system over its life:
(Acquisition, installation, operation, maintenance, risk management, disposal.) Why do we use TCO instead of the upfront cost to acquire the good?
Sometimes the big cost of a good isn’t just the upfront cost of the good. Imagine a house or car. Sure a car costs 30k, but don’t forget insurance, repairs, maintenance, gas, etc. TCO takes these things into account Quick review: npv=future amt/(1+i)^t

I=discount rate
T=number of time periods
What is TCO?
Total Cost of Ownership includes all the costs of a system over its life:
(Acquisition, installation, operation, maintenance, risk management, disposal.) Why do we use TCO instead of the upfront cost to acquire the good?
Sometimes the big cost of a good isn’t just the upfront cost of the good. Imagine a house or car. Sure a car costs 30k, but don’t forget insurance, repairs, maintenance, gas, etc. TCO takes these things into account Quick review: npv=future amt/(1+i)^t

I=discount rate
T=number of time periods
What is TCO?
Total Cost of Ownership includes all the costs of a system over its life:
(Acquisition, installation, operation, maintenance, risk management, disposal.) Why do we use TCO instead of the upfront cost to...
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