ITPEC IP April 2020 Question 16
Which of the following is the most appropriate explanation of TCO (Total Cost of Ownership) that is a major factor when any purchasing decision is made for a system?
Explanation
The installation costs plus the operation and management costs after installation — TCO counts what a system costs over its whole life, not just what it costs to acquire.
Total cost of ownership adds the initial costs (hardware, software, development or purchase, installation) to the running costs that follow: operation, maintenance, support, user training and management. The running costs often exceed the initial ones, which is why comparing systems by purchase price alone misleads a purchasing decision.
Answer (c)
Why not others:
- •(a) — only the running costs after installation; the initial costs of installing the system are left out
- •(b) — troubleshooting faults is one kind of running cost, not the total
- •(d) — planning and installation are only the costs before the system runs; the operation and management that follow for years are left out
Key rule: TCO spans the whole life cycle and every cost category; a definition limited to one phase or one kind of expense describes only part of it.
System Component · AI-written, may contain errors
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