Send the link below via email or IMCopy
Present to your audienceStart remote presentation
- Invited audience members will follow you as you navigate and present
- People invited to a presentation do not need a Prezi account
- This link expires 10 minutes after you close the presentation
- A maximum of 30 users can follow your presentation
- Learn more about this feature in our knowledge base article
Do you really want to delete this prezi?
Neither you, nor the coeditors you shared it with will be able to recover it again.
Make your likes visible on Facebook?
Connect your Facebook account to Prezi and let your likes appear on your timeline.
You can change this under Settings & Account at any time.
PO&G: 'Total Cost of Ownership Models'
Transcript of PO&G: 'Total Cost of Ownership Models'
that is used to proportionally distribute the cost of activities to cost objects.'
(Geiger, 1999) effective selection of cost
drivers can focus management
attention on the process
attributes that create cost. a financial estimate whose purpose is to help enterprise managers determine direct and indirect costs of a product or system to value purchase opportunities. A TCO model should be based on a core set of cost drivers, along with an auxiliary set of cost drivers Direct AND indirect costs need to be considered Previous Research Ellram's transaction-sequence cost component structure ('93)
Standard model and unique model (Ellram, '94) Canvinato
Jackson and Ostrom (life cycle costing)
Degraeve&Roodhooft (hierarchical levels) Effective implementation of TCO modeling depends heavily on the use of activity-based costing. Barriers to TCO Discussion Ellram&Siferd ('98): case-based research
relevance and porper use of TCO data
the nature of a firm's costing system Criticism Only one participant per organization
low response rate
Not representative The Study focus on 3 issues:
1. Type of model required (standard or specialized)
2. More specific information on cost drivers
3. Improve classification of cost drivers quantitative and qualitative cost drivers
modular drivers 13 categories derived from the study (e.g. operation costs, quality, logistics,...) There is no real standard model. TCO models will evolve into various possibilities: standardized, slightly modified or unique, No completely precise categorization scheme for TCO cost drivers. With a large number of cost drivers identified and the subjectivity of those, more complex classification may be useful. Personal Opinion Open-ended questions not suitable
positive: long-run orientation of TCO models A value-based TCO computation is suggested.