Calculate Landed TCO in Four Moves
Build a simple landed TCO comparison from unit price and hidden cost drivers.
Compare two valve suppliers for 100,000 units where Supplier A is cheaper by $0.38 but has higher defects. Total Cost of Ownership: price plus supplier-caused lifecycle costs The common trap is adding every imaginable cost or none at all. Use only material costs that differ by supplier. Base price Supplier A saves $38,000 at purchase: 100,000 units x $0.38. Start with the visible advantage so everyone sees what the low quote is worth. Defect cost A has 2.8% more defects. At $14 handling and replacement cost, that adds $39,200. A small defect-rate gap can erase a unit-price saving at volume.…
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