Total Cost of Ownership: A Case Study The purpose of this research paper is to provide a description of the Total Cost of Ownership phenomenon. This is done based on a case study regarding supply manager Joe Smith who needs to purchase 1000 computers for his organization. Organizations tend to save on the purchase price of a product; where it is much more effective and efficient to negotiate the other costs of ownership. Even though in working life we ​​tend to think that buying is always more expensive than leasing, the opposite is true. Renting 1000 computers for a duration of 3 years is more profitable than buying them. Total Cost of Ownership: A Case Study Introduction to the Phenomenon It was the year 1987 when the Gartner Group popularized the form of full cost accounting called Total Cost of Ownership (TCO). (author, Gartner Total Cost of Ownership). Originally TCO was mainly used in the IT business sector. This changed in the 1980s, when it became clear to many organizations that there is a clear difference between the purchase price and the total costs of ownership of a product. This brings us to the main strength of TCO analysis, beyond taking into account purchasing costs, which consist of the amount of money an organization pays for the service, product or required capital outlay. Also consider 1. Acquisition costs; these may consist of procurement, administration, transportation and taxes. 2. Usage costs, which consist of the costs associated with converting a specific product or service into a finished product. And finally 3. End of life costs; the costs or profits incurred in disposing of a product. TCO can be seen as a form of full cost accounting; systematically collects and presents all data for each proposed alternative. In the case of creating a TCO model, opportunity costs and present value are also taken into account. Taking present value into account means; make the difference between future and past cash outlays. This way you can consider the time value of money when comparing different alternatives. Finally, opportunity costs can be described as: “The value of the next best alternative foregone as a result of a decision” (Brue, 2005) After briefly explaining the TCO phenomenon, we can take a look at the case study that was presented to us. The Case Study: Purchase 1,000 Personal Computers“Supply manager Joe Smith was considering purchasing 1,000 desktop personal computers (PCs) for his organization.