Measuring total acquisition cost
28 August 2012
Q: As a senior buyer, I am charged with continually driving down the cost of components we buy. This means increasingly sourcing components from abroad. I have now been asked to present them on a total acquisition cost basis. Although I am aware of some o
A: Matthew Hunter, senior consultant at ADR International, writes: Total acquisition cost (TAC) for a component reflects the monetary cost of all the activities to source it. This will include identifying and qualifying suppliers; holding inventory (including minimum batch sizes); quality (including supplier audits); and payment (...