Total acquisition cost combines purchase price with the costs required to select, order, receive and place an item or service into use. The boundary should be stated for each analysis.
| Area | What the record should show |
|---|---|
| Control | Include relevant sourcing, transaction, freight, duty, installation, training or setup costs without drifting into later operating and disposal costs unless the model intends full ownership cost. |
| Evidence | Keep the calculation, period, quantities, source data, assumptions and exclusions used to compare options. |
| Tradeoff | A narrow acquisition model can favor a cheap supplier while omitting the inspection, setup or urgent freight their offer creates. |
When it matters
Include relevant sourcing, transaction, freight, duty, installation, training or setup costs without drifting into later operating and disposal costs unless the model intends full ownership cost.
Review before approval
Keep the calculation, period, quantities, source data, assumptions and exclusions used to compare options.
A narrow acquisition model can favor a cheap supplier while omitting the inspection, setup or urgent freight their offer creates.
