Has your sourcing department ever mandated the use of a national contract to buy an item at a certain price when that same product seemed to be less expensive at a local store? It probably happens fairly regularly. It is certainly a source of frustration for employees in the field, who feel as if this is an example of higher-ups undermining local budgets. On the surface, this frustration seems valid, but a closer look at all the costs involved in the acquisition and use of those products and services likely would result in a different conclusion altogether. This closer examination is often referred to as all-in-cost, true cost, or total cost of ownership (TCO) analysis.
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