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Procurement · Definition
Total Cost of Ownership
The full lifetime cost of a purchase, not just its price.
TCO adds up everything a purchase will cost over its life: price, freight and duty, installation, training, consumables, energy, maintenance, downtime, spares and eventual disposal.
It routinely reverses decisions made on price alone. The cheaper pump with scarce spare parts and higher power draw is usually the expensive one by year three.
How it is calculated
TCO = Acquisition + Operating + Maintenance + Disposal costs
Discount future costs to present value for long-lived assets.
Total Cost of Ownership is not just a definition here
Procurement runs on this vocabulary every day in AWRA OpsHub — 40 of our 259 glossary terms describe things the platform actually does.