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Total Cost of Ownership: Elements and Implementation
Author(s) -
Ellram Lisa
Publication year - 1993
Publication title -
international journal of purchasing and materials management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.75
H-Index - 92
eISSN - 1745-493X
pISSN - 1055-6001
DOI - 10.1111/j.1745-493x.1993.tb00013.x
Subject(s) - total cost of ownership , purchasing , total cost , business , key (lock) , industrial organization , operations management , marketing , economics , computer science , accounting , computer security
While total cost of ownership concepts are widely discussed, in practice most firms do not utilize the total cost concept in purchasing. This article uses findings from studies of nine firms that use total cost of ownership to define the total cost of ownership concept and benefits. A framework for classifying cost elements is developed. The article concludes with a discussion of key total cost of ownership implementation issues, and explores two approaches to implementation of total cost of ownership concepts in purchasing.