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Q16-10PE

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Operations And Supply Chain Management
Found in: Page 421
Operations And Supply Chain Management

Operations And Supply Chain Management

Book edition 14th
Author(s) F. Robert Jacobs
Pages 800 pages
ISBN 9780078024023

Short Answer

Question: Refers to an estimate of the cost of an item that includes all costs related to the procurement and use of an item, including the costs of disposal after its useful life.

Answer

The total cost of ownership.

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Step by Step Solution

Step-by-Step Solution Step 1: About the total cost of ownership

The total cost of ownershipor the TCO is the amount that is related to the owner. In other words, the purchase price and the total costs of operations together makes the total cost of ownership.

Step 2: The total cost of ownership

The term TCO (Total cost of ownership.) refers to the real cost of acquiring a service or product from a certain source, in addition to the initial acquisition rate.

Businesses use the total cost of ownership to analyze commercial agreements, whereas consumers use the overall price to evaluate possible acquisitions. Corporations and people assess the total cost of ownership when purchasing assets as well as investing in capital projects.

The expense of acquisition as well as the operating cost as well as repair is frequently detailed individually on accounting records for a firm.

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