6-3 Evaluate and Analyze Actual TCO

6-3.1 TCO Analysis

TCO refers to the total cost incurred over the life-cycle of an item, encompassing development, purchase, use, maintenance, support, and disposal. A TCO analysis exposes the hidden costs easily overlooked during budget planning or when making purchase decisions. As a result, it becomes possible to yield higher savings by optimizing relevant cost elements throughout the entire project life cycle versus by individual SCM step.