Public Procurement Toolkit: Total Life Cycle Cost Analysis
The Public Procurement Toolkit provides purchasing professionals with a suite of tools to enhance the value they deliver to stakeholders and residents. In this video, PPG Vice President Elena Hoffnagle and Harvard Kennedy School faculty member Mark Fagan talk about the concept of total life cycle cost analysis, also known as total cost of ownership.
Total life cycle cost refers to the complete cost associated with acquiring, operating, maintaining, and ultimately disposing of an asset or product over its entire lifespan. This concept is used to assess procurement alternatives by considering all relevant costs over time, not just the initial purchase price. It helps organizations make informed decisions about cost efficiency and sustainability. In this first installment of the Public Procurement Toolkit, you’ll learn about the elements of total life cycle cost analysis and how to apply it to common purchases.