Total Cost of Ownership Quiz

What is the primary purpose of Total Cost of Ownership (TCO) analysis?

• To choose the cheapest supplier

• To find the lowest lifetime cost of goods or services

• To reduce product design time

• To calculate selling prices

TCO is most useful when purchasing items with minimal maintenance or operating costs.

• True

• Flase

Which of the following is not a component in the TCO Matrix horizontal axis?

• Possession and use

• Elimination or recycling

• Acquisition

• Customer satisfaction

The TCO Matrix considers both cash and non-cash savings.

• True

• False

In the TCO Matrix, which level represents costs that occur every time an order is placed?

• Supplier level

• Unit level

• Product level

• Order level

Which of the following is a cost that may appear in a TCO analysis?

• Storage cost

• End-of-life cost

• Conflict resolution cost

• All of the above

Social/cultural controls in the Management Control Framework (MCF) include goal setting and performance incentives.

• True

• False

What type of risk in the MCF refers to the risk of partners not achieving the goals even with good cooperation?

• Financial risk

• Operational risk

• Performance risk

• Legal risk

Which of the following is not an antecedent of risk in the MCF?

• Partner knowledge

• Market price

• Asset specificity

• Interdependence

The General Management Framework (GMF) links a high degree of supplier collaboration to a high degree of extended supply chain management.

• True

• False