What is the Purpose of the TCO Calculator?

The TCO Calculator is designed to help people who are new to the concept of total cost of ownership.

It may not be particularly useful to those who are experienced and/or qualified in accounting or related disciplines - it is
recommended that these people continue to use their current methodology, or seek more sophisticated software.

The calculator contains a number of categories and sub-categories of costs associated with the life-cycle of an item. Some
these are obvious, like the purchase cost of the item, but some are things that you might not have thought of, such as the c
of outages. The calculator is designed to prompt you to think about costs that you may not have thought of, but you only ne
to enter data into the fields that apply to the product that you are procuring.

The TCO Calculator will automatically calculate:

* an overall Total Cost of Ownership
* totals for the various sections, categories and sub-categories, and
* percentages of the TCO for each of the categories.

The TCO calculator should be used in conjunction with the Guide to the Total Cost of Ownership.
This can be found on the website:
HomePage | Procurement.govt.nz

Why Use the TCO Calculator?

Using the Calculator will help you to understand the total costs of the item, over its whole life.

You can use the calculator to compare the TCO for several options, to make a decision about which is the least expensive
the expected lifetime of the product or service.

You can ask suppliers to present the total cost of ownership in the proposals. You may use this Calculator as a template in
tender.

Does the TCO calculator include GST?

This calculator is exclusive of GST. If an item was being purchased from overseas, it would be appropriate to include custo
duties as this are not claimed back by the entity via the GST process (GST is on top). See
http://www.customs.govt.nz/inprivate/charges/dutiesandcharges/Pages/default.aspx for details.
Total Cost of Ownership - Quick Calculator

Name of product / service: [insert name]

Expected lifetime of the item: 10

enter data here

EXPENSES 6

Cost category 1 Cost items subtotal costs $

All initial costs on purchase (one-off)
Purchase price $ 3,453.00
Accessories $ 2,345.00
Legal costs (eg conveyancing) $ 2,345.00
Duties / taxes on purchased item (excludes GST) $ 543.00
Packaging $ 543.00
Delivery costs $ 654,565.00
Installation / integration / engineering / calibration costs $ 34,545.00
Testing / initial inspection costs $ 543.00
Building consents $ 34,566.00
Alterations, cabling, telephone links $ 54,444.00
Initial licence costs $ 44,444.00
subtotal $ 832,336.00
enter data here enter data here this column automatically
6 6 calculates

Cost category 2 Cost items unit cost # p.a. subtotal cost $

Regular ongoing operational costs (per annum) Annual licences $ 45,345.00 1 $ 45,345.00
Consumables eg ink $ 345.00 2 $ 690.00
Consumables eg lubricants $ 67.00 1 $ 67.00
Consumables eg cleaning products $ 657,567.00 3 $ 1,972,701.00
Consumables eg health and safety equipment $ 567.00 1 $ 567.00
Consumables eg paper $ 567.00 2 $ 1,134.00
Software upgrades $ 5,675.00 1 $ 5,675.00
Staff training $ 676.00 2 $ 1,352.00
subtotal $ 2,027,531.00

Cost category 3 Cost items unit cost # p.a. subtotal cost $

Fuel / energy costs (per annum) Electricity $ 3,456.00 1 $ 3,456.00
Gas $ 56,345.00 1 $ 56,345.00
Water $ 3,456.00 3 $ 10,368.00

subtotal $ 70,169.00

Cost category 4 Cost items unit cost # p.a. subtotal cost $

Regular service and maintenance (per annum) Annual maintenance $ 4,567.00 1 $ 4,567.00
Preventative maintenance $ 456.00 1 $ 456.00
Other maintenance $ 654.00 1 $ 654.00
Spare parts $ 678.00 5 $ 3,390.00
Hire of replacement equipment during downtime $ 54.00 1 $ 54.00

subtotal $ 9,121.00
Cost category 5 Cost items unit cost # p.a. subtotal cost $
Anticipated downtime (per annum) Planned maintenance outages - additional costs $ 2,345.00 1 $ 5,565.00
Unplanned outages - additional costs $ 2,345.00 1 $ 666.00
Unplanned outages - lost revenue $ 2,345.00 1 $ 234.00
$ 345.00 1 $ 345.00

subtotal $ 6,810.00

Cost category 6 Cost items unit cost # p.a. subtotal cost $

Additional supplier costs (per annum) Management costs, eg time for meetings $ 345.00 1 $ 345.00

Project management costs $ 345.00 1 $ 345.00

Costs associated with additional work requested $ 3.00 1 $ 432.00
Supplier travel and accommodation costs $ 345.00 5 $ 1,725.00

National / International calls to contact supplier $ 5.00 1 $ 5.00

Overtime costs $ 4.00 1 $ 4.00

subtotal $ 2,856.00

Cost category 7 Cost items subtotal cost $

Other one-off costs (not per annum) Regular overhaul (at year 5) $ 10,500.00
Recalibration and testing after overhaul) $ 1,500.00

subtotal $ 12,000.00

Cost category 8 Cost items subtotal cost $

Disposal costs (one-off not per annum) Decommissioning / deconstruction costs $ 2,345.00
Cost of transportation of equipment from site $ 355.00

Disposal costs eg hazardous items $ 345.00

Restoration of site to original state $ 345.00
Write-off $ 345,345.00

subtotal $ 348,735.00

INCOME

Income on disposal (one-off not per annum) Income items subtotal income $

Resale / salvage value of equipment $ 2,345.00

Resale / salvage value of parts $ 345.00
Resale / salvage value of operational items, eg, ink cartridges $ 500.00

subtotal $ 3,190.00
Summary
Total costs p.a. Total costs over whole-of-life % of TCO

Category 1: initial purchase costs

832,336.00 one-off so not applicable 3.25%

Category 2: regular ongoing operational costs

2,027,531.00 20,275,310.00 79.20%

Category 3: fuel/ energy

70,169.00 701,690.00 2.74%

Category 4: regular service and maintenance

9,121.00 91,210.00 0.36%

Category 5: anticipated downtime

6,810.00 68,100.00 0.27%

Category 6: additional supplier costs

2,856.00 28,560.00 0.11%

Category 7: one-off costs

12,000.00 one-off so not applicable 0.05%

Category 8: costs of disposal

348,735.00 one-off so not applicable 1.36%

INCOME

total income

3,190.00 one-off so not applicable 0.01%

Summary of expenses / income $ % of TCO

Total initial costs 832,336.00 3.25%

Total expenses p.a. 2,477,222.00 9.68%

Total expenses over whole-of-life 24,772,220.00 96.76%

Total income 3,190.00 0.01%

TOTAL COST OF OWNERSHIP 25,601,366.00