Total cost of ownership
Also known as: TCO
The total cost of ownership is the total cost of owning a product or using a service over its life/use cycle. Other than the price to purchase the product, it includes all costs from the time of purchase to the time it is abandoned. Calculating the total cost of ownership can be a way to determine and compare the costs of products in advance or after the fact.
Costs that can be part of the total cost of ownership:
- Maintenance costs
- Depreciation
- Repair costs
- Insurance
- License fee
- Warranties and certifications
- Training and education costs
- Financing costs
- Taxes
- Personnel costs
- Management fees
- Fuel costs
- Electricity costs
- Cost of risks such as outages/downtime and associated precautions
- Security costs
- Distribution costs
- Huisvestingskosten/opslagkosten
- Research costs
- Disposal or disposal costs
- Opportunity cost
