When proposals for capital equipment are received,the sourcing team must tabulate and run comparisons for a total profitability analysis.The key input in this analysis is:

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TCO stands for Total Cost of Ownership and includes all costs associated with owning and operating a piece of equipment over its entire lifespan. This includes not only the initial purchase price but also maintenance, repairs, replacement parts, energy costs, and any other costs that may arise. Analyzing the TCO of different equipment options will provide a more comprehensive understanding of the total profitability of each option. Delivery time, maintenance, labor, and pay off time are also important considerations, but they do not provide as complete of a picture as TCO.

When Proposals for Capital Equipment Are Received,the Sourcing Team Must