The Total Cost of Ownership Score

Abstract

This paper introduces the Total Cost of Ownership Score (TCOS) as a comprehensive framework for evaluating and improving product repair, durability, and maintenance all together on a uniform scale. The scoring procedure, implemented through a spreadsheet, calculates a product's total cost of ownership per year based on likelihood of failure modes, repair costs per failure (parts, labor, and other), likelihoods of repair successes, and cost of replacing the product if repairs fail. Because costs and repair times vary substantially based on many factors, and likelihoods of device failures and repair successes are stochastic by nature, the uncertainties are large and must be displayed in final scores. However, preliminary results indicate that even with large uncertainties, the TCOS provides meaningful product comparisons and hotspot identification. The advantages of the TCOS include scoring quantitatively in units that both consumers and businesses understand and value, to drive market behavior; vast reduction of subjective judgments in scoring; measuring durability and repair on the same scale; universal applicability, enabling legislation or policy to scale across products easier; and enabling legislation to allow innovation rather than prescribing designs. The TCOS's two challenges are that the data required is not publicly available for most products, so it requires empirical product testing; and further development / negotiation is required to decide what standard assumptions can be applied as shortcuts to shrink the scope of empirical testing.