Supply Chain Management Professional (SCMP) · Question
In the context of procurement, what does 'total cost of ownership' (TCO) include beyond the purchase price?
TCO considers all direct and indirect costs associated with a product or service throughout its entire lifecycle, not just the initial acquisition.
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Question: In the context of procurement, what does 'total cost of ownership' (TCO) include beyond the purchase price?
Answer options: ✅ Acquisition, operating, and disposal costs
- Only the initial purchase price and shipping
- Only the maintenance and repair costs
- Competitors' pricing strategies
Correct answer: Acquisition, operating, and disposal costs
Explanation: TCO considers all direct and indirect costs associated with a product or service throughout its entire lifecycle, not just the initial acquisition.
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