Lifecycle Analysis
Financial models that account for every expense associated with a piece of equipment from purchase to disposal provide a true picture of its long term value. A total cost of ownership calculation includes the initial price, power consumption, periodic calibration and repair frequency. It is a practical tool for procurement officers in industrial facilities.
Acquisition Costs
Initial price points often represent only a small fraction of the money spent over the entire working life of a device. When performing a total cost of ownership calculation, the buyer must also consider the cost of the specialized cables and mounting hardware required for installation. This prevents the selection of a cheap device that is expensive to integrate.
Operational Outlay
Ongoing requirements for maintenance and the consumption of resources add to the burden of the measurement system. The total cost of ownership calculation factors in the downtime required for recalibration and the technical expertise needed to operate the gear. This helps in identifying the most efficient technology for a specific application.
Disposal Value
Residual value is calculated at the end of the service life. The final step in a total cost of ownership calculation is the estimation of the decommissioning costs.
