CHAPTER 7

Total Cost of Ownership Models

For many companies, total cost of ownership (TCO) is out of control.

—Dr. Wayne Applebaum

End the practice of awarding business on the basis of price tag alone.

—W. Edwards Deming

In previous chapters models of varying types, both internal and external, have been explained in detail to assist organizational decision making. Most of the emphasis when completing those models was on the direct costs associated with the operation or procured product/service. Total cost of ownership (TCO) models focus on all the costs associated with a particular operation or acquisition over its entire life span, cradle-to-grave. Generally, these models are used mostly in conjunction with the other models discussed in situations ...

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