You are a SC Manager of a metallurgic factory. The owners wants to buy new machinery for their plant. There are only two suppliers that sell referred machine in your country, one sells pre-owned machine, but its retail price is much less expensive than the newest model in the market. The price of the used machine is US$16K and the other supplier sells the machine at US$25.3K The difference is pretty big in the purchase price, but with your experience is recommended to calculate the TCO considering: Insurance costs are the same for both = US$300 per year Maintenance cost for new machine is US$300 per year and the other is US$700 per year The residual value of used machine at the end of 10 years is US$13K and for the other is US$21K. TCO EXERCISES What would be the better purchase?

Answer rating: 100% (QA)

Based on the information provided it seems that the new machine would be the better purchase in the ... View the full answer