Total Cost of Ownership


Total Cost of Ownership is a methodology that looks beyond the purchase price to include many other related costs. The concept reviews the basic of the total cost of ownership and ways to implement it.

Technique Overview

Total Cost of Ownership Definition

Total cost of ownership (TCO) is a methodology and philosophy that, in addition to the price of a purchase, incorporates other purchase-related costs. TCO approach has become increasingly important as it helps organisations to look for ways to understand and manage their costs better (Bhutta and Huq, 2002). TCO can be defined as "the present value of all costs associated with a product, service, or capital equipment that are incurred over its expected life” (Monczka et al., 2009: 408).

Total Cost of Ownership Description *

* The full technique overview will be available soon. Contact us to register your interest in our business management platform, and learn all about Total Cost of Ownership.

Business Evidence

Strengths, weaknesses and examples of Total Cost of Ownership *

* The business evidence section is for premium members only. Please contact us about accessing the Business Evidence.

Business Application

Implementation, success factors and measures of Total Cost of Ownership *

* The business application section is for premium members only. Please contact us about accessing the Business application.

Professional Tools

Total Cost of Ownership videos and downloads *

* The professional tools section is for premium members only. Please contact us about accessing the professional tools.

Further Reading

Total Cost of Ownership web and print resources *

Total Cost of Ownership references (4 of up to 20) *

  • Bhutta, K.S. and Huq, F. (2002) Supplier Selection Problem: A Comparison of the Total Cost of Ownership and Analytic Hierarchy Process Approaches. Supply Chain Management: An International Journal, Vol. 7(3), pp. 126-135.
  • CamfilFarr. Air Filtration: Total Cost of Ownership. [online] Available at: www.camfilfarr.com/Global/Documents/US/Literature Library/Case Study - TCO - Hospital - CH.pdf [Accessed 20 December 2011].
  • CIPS Australia (2007) Benchmarking: So How Are We Doing and Where Do We Want To Be? The Knowledge Club, Iss.5, March. In The Knowledge Club Compendium, Iss. 5-8.
  • CIPS: Whole Life Costing.

* The further reading section is for premium members only. Please contact us about accessing the further reading.


Learn more about KnowledgeBrief Manage and how you can equip yourself with the knowledge to succeed on Total Cost of Ownership and hundreds of other essential business management techniques

Other members were also interested in...

Related Concept: Corporate Sustainability

This concept explores the different ways in which Corporate Sustainability is defined and provides an account of success factors and business evidence.