Total Cost and Benefit of Ownership

Plant operators are getting more and more aware that operating costs are usually exceeding acquisition costs. For that reason there is an increased interest in methods like Life Cycle Costing (LCC) and Total Cost of Ownership (TCO). Weakness of these methods is their exclusive focus on costs. Because they do not allow differentiating benefits of various machines and plants, a holistic evaluation is difficult. The concept developed by the Institute of Production Engineering and Machine Tools (IFW) is concentrating on that issue, extending the Life Cycle Costing by a benefit assessment of investments.