00:01
So we are going to look at two things.
00:04
The first one being what total cost of ownership concept is.
00:09
And then secondly, some challenges that must be overcome when implementing such a concept.
00:17
So let's start with the definition of total cost of ownership.
00:25
So basically it is an analysis which is and to cover all lifetime costs.
00:36
So we can say lifetime costs of a project or asset.
00:50
So basically it looks at all the costs associated with owning a particular project or owning a particular asset or owning a particular product.
01:02
So the purchase price of an asset plus the costs of operating it.
01:14
So such tco costs include purchase price plus operating cost.
01:26
So we are seeking to find all the quantitative measures that are instituted within the conceptual framework of tco.
01:37
So there's a purchase price plus, and the only by the purchase price we are talking about the make or buy decision, and then operating costs.
01:50
So those are the two fundamental costs that are supposed to be taken into consideration within this concept.
01:57
Now, the problem associated with the total cost of ownership measurement is because it focuses, on quantitative rather than qualitative factors.
02:14
It only focuses on quantitative as opposed to qualitative, which is a major weakness that they have to be taken into consideration.
02:35
Qualitative, okay...