Total cost of ownership factors in procurement and technology economic assessment: A systematic literature review

Abstract

Total Cost of Ownership is an excellent method for understanding the true cost of buying goods or services from a particular supplier. This approach considers buying costs and takes the costs that arise during the operation and disposal phases of an equipment lifecycle. Therefore, applying the Total Cost of Ownership in supplier selection, negotiation, and evaluation is essential. This research aims to study the development of TCO for the last ten years. A systematic literature review has been conducted to identify and cluster TCO factors based on previous research. There has been a shift in the purpose of using TCO since the last decade from being useful for supplier selection to technology economic assessment, significantly often used to assess the economic costs of using electric vehicle technology. We also highlight the two most dominant TCO factors: one-time costs and recurring costs. We propose a conceptual factor, factors influencing TCO, and future research directions.