--- title: "SCM Case Study: IISCM – 037 | Total Cost of Ownership" description: Case study is a detailed study of a specific topic, subject or a phenomenon to understand it more practically. Here we deal with Total Cost of Ownership which speaks about a single value on the complete life cycle of a product purchases that includes from the cost of acquisition to the product’s salvage value. image: https://blog.fhyzics.net/hubfs/5aa2882d2eedb.jpg --- ![Fhyzics-logo](https://blog.fhyzics.net/hs-fs/hubfs/Fhyzics-logo.png?width=100&name=Fhyzics-logo.png "Fhyzics-logo") ![Fhyzics-logo](https://blog.fhyzics.net/hs-fs/hubfs/Fhyzics-logo.png?width=100&name=Fhyzics-logo.png "Fhyzics-logo") [![Request Quote](https://no-cache.hubspot.com/cta/default/3112120/9f3d168c-6bf2-4090-8529-bd721423c14e.png)](https://cta-redirect.hubspot.com/cta/redirect/3112120/9f3d168c-6bf2-4090-8529-bd721423c14e) [![Click me](https://no-cache.hubspot.com/cta/default/3112120/717ff434-4d3d-4712-819e-dccb5a46efda.png)](https://cta-redirect.hubspot.com/cta/redirect/3112120/717ff434-4d3d-4712-819e-dccb5a46efda) ![hero-img1](https://cdn2.hubspot.net/hub/5152923/hubfs/Creative_Theme/image/hero-img1.jpg?width=1810&name=hero-img1.jpg "hero-img1") - [**](https://www.facebook.com/sharer/sharer.php?u=https://blog.fhyzics.net/chartered-institute-of-procurement-and-supply-cips/scm-case-study-iiscm-037-total-cost-of-ownership&title=SCM%20Case%20Study:%20IISCM%20–%20037%20|%20Total%20Cost%20of%20Ownership&description=Case%20study%20is%20a%20detailed%20study%20of%20a%20specific%20topic,%20subject%20or%20a%20phenomenon%20to%20understand%20it%20more%20practically.%20Here%20we%20deal%20with%20Total%20Cost%20of%20Ownership%20which%20speaks%20about%20a%20single%20value%20on%20the%20complete%20life%20cycle%20of%20a%20product%20purchases%20that%20includes%20from%20the%20cost%20of%20acquisition%20to%20the%20product’s%20salvage%20value.) - [**](https://twitter.com/intent/tweet?source=https://blog.fhyzics.net/chartered-institute-of-procurement-and-supply-cips/scm-case-study-iiscm-037-total-cost-of-ownership&text=SCM%20Case%20Study:%20IISCM%20–%20037%20|%20Total%20Cost%20of%20Ownership%20-%20https://blog.fhyzics.net/chartered-institute-of-procurement-and-supply-cips/scm-case-study-iiscm-037-total-cost-of-ownership) - [**](http://www.linkedin.com/shareArticle?mini=true&url=https://blog.fhyzics.net/chartered-institute-of-procurement-and-supply-cips/scm-case-study-iiscm-037-total-cost-of-ownership&title=SCM%20Case%20Study:%20IISCM%20–%20037%20|%20Total%20Cost%20of%20Ownership&summary=Case%20study%20is%20a%20detailed%20study%20of%20a%20specific%20topic,%20subject%20or%20a%20phenomenon%20to%20understand%20it%20more%20practically.%20Here%20we%20deal%20with%20Total%20Cost%20of%20Ownership%20which%20speaks%20about%20a%20single%20value%20on%20the%20complete%20life%20cycle%20of%20a%20product%20purchases%20that%20includes%20from%20the%20cost%20of%20acquisition%20to%20the%20product’s%20salvage%20value.) 29 August 2020 Saturday ## SCM Case Study: IISCM – 037 | Total Cost of Ownership By [IISCM](https://blog.fhyzics.net/chartered-institute-of-procurement-and-supply-cips/author/iiscm) In: [Total Cost of Ownership](https://blog.fhyzics.net/chartered-institute-of-procurement-and-supply-cips/tag/total-cost-of-ownership) **0** Comments Ju Han Group of Companies decided to open a new workspace at the top floor of their existing building. Planned floor space – 1500 Sq. Ft. Ju Han’s facility management team came out with a conclusion that Blue Star AC (IC318MATU) is the best. It’s your responsibility to calculate the following values. 1. ** Purchase Price of Air Conditioners** 2. ** Total Cost of Acquisition of Air Conditioners** 3. ** Total Cost of Ownership of Air Conditioners** It is decided that 10 Air Conditioners (1.5 ton) are required. The cost of AC is Rs. 40,000/Unit and the delivery will be taken care by the company. The Outdoor Unit is placed at the roof of the building for safety purposes which can be clamped using the supports which costs Rs. 1000 / Pair that withstand up to 20 Kgs. Above 20 Kgs it would cost Rs. 1500 / Pair. 10 Windows need to be closed with curtains which costs Rs. 675 each. Air curtain of Rs. 15,000 need to be installed at both the entrances acting as a barrier for conditioned air. Since, it is a 5 Star AC the electricity consumption charges will be less and consume only 100 Units every month (costing – Rs. 1835). At the end of 7 Years, the salvage value of this AC will be Rs. 12000. Humidity meter of Rs. 455 is placed at both the entrances to monitor the condition of the room. The vertical tube of 7.5 Meters is required for 6 Nos. and 8.5 Meters for 4 Nos. The tube costs Rs. 235 / Meter. Gas filling is free of cost only for the first time. It is required to refill the gas every three months due to high usage which costs Rs. 2000. Remotes are kept at places and the batteries are changed once in three months. It costs about Rs. 20 / two pieces. Monthly maintenance is needed which costs Rs. 400 and the installation cost would be Rs. 650 including labour charges. Un-installing will again costs Rs. 650. The capacitor will be costing Rs. 400 and due to place constraint for Outdoor Unit, the air circulation won’t be good, and the capacitor need to be changed every two months for 4 units. Compressor need to be changed every 4 Years due to continuous running. Compressor would cost around Rs. 4000. Since it’s in the top floor, the dust will be in higher rate and the air filters need to be changed once in two months. Cost of air filter is Rs. 300. Due to over crowd, the team decided to install new fans costing Rs. 2500 near all the Indoor Units. Package box contains 1 Outdoor Unit, 1 Indoor Unit, 1 Remote (2 Batteries), User Manual. ***Note: Please consider the below specification table for detailed information.*** ![table1](https://blog.fhyzics.net/hs-fs/hubfs/table1.png?width=517&name=table1.png) **Compressor, Refrigerant & Ambient Operations ** ![table2](https://blog.fhyzics.net/hs-fs/hubfs/table2.png?width=520&name=table2.png) **Remote** ![table3](https://blog.fhyzics.net/hs-fs/hubfs/table3.png?width=528&name=table3.png) **Dimensions, Weight & Input Power Supply** ![table4](https://blog.fhyzics.net/hs-fs/hubfs/table4.png?width=520&name=table4.png) **List of things that will be done during AC Maintenance** - Controls & Safeties – Inspected & tested - Relays & Contactors – Inspected & cleaned - Crankcase Heater – Operationally inspected - Unit Wiring – Inspected & loose connections tightened - Temperature & Pressures – Recorded - Capacitors – Tested - Lubrication – Application to motors & bearings. - Belts & Pulleys – Inspected & adjusted - Condensate Drain – Checked to assure it is open - Air Filter – Replaced at customer’s option - Voltage & Amp – Draw of the blower motor, compressor & condenser - Motors – Cleaned & inspected   **Tags:** [Total Cost of Ownership](https://blog.fhyzics.net/chartered-institute-of-procurement-and-supply-cips/tag/total-cost-of-ownership) Share: - [**](https://www.facebook.com/sharer/sharer.php?u=https://blog.fhyzics.net/chartered-institute-of-procurement-and-supply-cips/scm-case-study-iiscm-037-total-cost-of-ownership&title=SCM%20Case%20Study:%20IISCM%20–%20037%20|%20Total%20Cost%20of%20Ownership&description=Case%20study%20is%20a%20detailed%20study%20of%20a%20specific%20topic,%20subject%20or%20a%20phenomenon%20to%20understand%20it%20more%20practically.%20Here%20we%20deal%20with%20Total%20Cost%20of%20Ownership%20which%20speaks%20about%20a%20single%20value%20on%20the%20complete%20life%20cycle%20of%20a%20product%20purchases%20that%20includes%20from%20the%20cost%20of%20acquisition%20to%20the%20product’s%20salvage%20value.) - [**](https://twitter.com/intent/tweet?source=https://blog.fhyzics.net/chartered-institute-of-procurement-and-supply-cips/scm-case-study-iiscm-037-total-cost-of-ownership&text=SCM%20Case%20Study:%20IISCM%20–%20037%20|%20Total%20Cost%20of%20Ownership%20-%20https://blog.fhyzics.net/chartered-institute-of-procurement-and-supply-cips/scm-case-study-iiscm-037-total-cost-of-ownership) - [**](http://www.linkedin.com/shareArticle?mini=true&url=https://blog.fhyzics.net/chartered-institute-of-procurement-and-supply-cips/scm-case-study-iiscm-037-total-cost-of-ownership&title=SCM%20Case%20Study:%20IISCM%20–%20037%20|%20Total%20Cost%20of%20Ownership&summary=Case%20study%20is%20a%20detailed%20study%20of%20a%20specific%20topic,%20subject%20or%20a%20phenomenon%20to%20understand%20it%20more%20practically.%20Here%20we%20deal%20with%20Total%20Cost%20of%20Ownership%20which%20speaks%20about%20a%20single%20value%20on%20the%20complete%20life%20cycle%20of%20a%20product%20purchases%20that%20includes%20from%20the%20cost%20of%20acquisition%20to%20the%20product’s%20salvage%20value.) ### Written by [IISCM](https://blog.fhyzics.net/chartered-institute-of-procurement-and-supply-cips/author/iiscm) Integrated Institute of Supply Chain Management, a unit of Fhyzics Business Consultants Private Limited specialising in supply chain management consulting and education. IISCM trains and certifies SCM professionals in procurement, supply chain management, inventory, and warehousing. 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