15 Questions
TCO analysis mainly focuses on one-time costs rather than recurring costs.
False
Activity-based costing (ABC) is not related to TCO analysis.
False
Total cost of ownership (TCO) is relevant only for businesses and not applicable in personal decision-making.
False
In TCO analysis, accurately allocating manufacturing overhead is not a significant challenge.
False
Shifting focus from price to total cost is not necessary for supply managers.
False
TCO analysis of equipment purchases does not consider maintenance and parts expenditures.
False
TCO can be accurately estimated without involving different functions within an organization.
False
Supply managers should focus solely on the price of materials, services, and equipment, rather than the total cost of ownership.
False
TCO analysis should not be used on recurring material costs.
False
TCO analysis of equipment purchases usually does a lot to help reduce the expenditures for maintenance and parts over the lives of the investments.
True
Accurately allocating manufacturing overhead to products being purchased is an easy problem to resolve in TCO analysis.
False
Activity-based costing (ABC) is a technique for directly assigning costs consumed by the object.
True
TCO is not an analytical tool, but rather a philosophy.
False
Accurate estimation of total costs requires a cross-functional approach, not just extensive time and motion studies by supply management.
True
TCO is not applicable in one's private life to enable better decision-making.
False
Test your knowledge of Total Cost of Ownership (TCO) in supply chain management with these true or false questions. Learn about the philosophy of considering all supply chain related costs when doing business and the importance of shifting focus from price to total cost. Evaluate your understanding of TCO analysis for recurring material costs and labor base.
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