Evaluating the Total Cost of Ownership
Dated: December 9th, 2009
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Alan over at the Sustainability in Packaging blog made a great post about how to evaluate the True Cost of Cheap Equipment:
The seemingly lower purchase price, although deceptive, is not malicious in nature. The omission of regulatory compliance or the absence of IOQ document costs stem mostly from where the vendor stands on the evolutionary timescale vis à vie the market they are entering. The onus therefore is on the buyer to encompass non-trivial costs in their analysis—costs which exceed the mere functioning of the machine.
Beware of hidden costs
One simple way to evaluate how high your total cost of ownership will be for a machine is to ask the vendor what percentage of his business is in spare parts.