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What are examples of implicit costs included in total cost of facility ownership (TCFO)?

Asked 3 months ago

Hi everyone, I'm wondering about the different types of costs that should be included in calculating the total cost of facility ownership (TCFO). I know that explicit costs such as energy bills, maintenance fees, and rent are commonly included in this calculation, but I'm curious about implicit costs as well. What are examples of implicit costs that should be factored into the TCFO calculation? Cheers.

Benny Macias

Tuesday, March 21, 2023

When considering the Total Cost of Facility Ownership, the following implicit or indirect costs could be included:

  • The opportunity costs that result from a decision to allocate resources to a facility instead of investing it in other opportunities that may have generated a higher return
  • The cost of depreciation, or a decrease in the value of an asset over time
  • The potential loss of productivity caused by a poorly maintained and organized facility
  • The potential loss of revenue that results from equipment downtime
  • The potential harm caused to employees or customers by neglecting health and safety standards in a facility

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