A comprehensive cost assessment that includes purchase price plus all costs of acquiring, operating, and disposing of an item over its entire lifecycle.
Total Cost of Ownership (TCO) is a comprehensive cost assessment that goes beyond the purchase price to include all costs associated with acquiring, operating, maintaining, and disposing of a product or asset over its entire lifecycle.
In manufacturing sourcing, TCO includes unit price, tooling costs, shipping and customs duties, quality inspection, warranty claims, inventory carrying costs, and potential rework expenses. Evaluating suppliers on TCO rather than unit price alone leads to better sourcing decisions. FindMyFactory encourages TCO-based evaluation when comparing manufacturing partners.