Eskom Procurement Book 2015

TOTAL COST OF OWNERSHIP (TCO)

Figure 6.2: Major categories for the components of total cost of ownership [7].

• Within the country of sale: Local transportation and handling, storage fees, taxes, safety stock, inventory carrying charges, yield, productivity implications, maintenance, quality, overhead allocation, payment terms. The following section illustrates the use of total cost modelling in a worked example.

139 CHAPTER 6