Total Cost of Ownership in the Context of Supply Chain Management: An Instructional Case

Abstract

This paper presents and discusses an in-class exercise on Total Cost of Ownership (TCO). TCO can be included within the Supply Chain Cost Management (SCCM) framework, being essentially a tool that aims to determine the true cost of buying from a specific supplier. Case studies and instructional cases are important from an instructional perspective and they can be also used as experiments to know more about the effectiveness of TCO in a real context. The case presented here represents an original instrument for the understanding and dissemination of TCO. The case design and materials used are explained and discussed. This case has been applied in the format of short course but it can also be used in class in a program of several weeks. The results obtained demonstrate that this in-class exercise can be used to involve students or practitioners in a dynamic process of learning and discussion on supplier cost management thus, offering several opportunities for experimental research.