Journal of Purchasing and Supply Management vol:17 issue:2011 pages:132-142
Total Cost of Ownership (TCO) involves the monetary quantification of nonfinancial attributes and the
subsequent aggregation of these attributes into a financial summary measure. We consider monetary quantifications that are not perfect, because some attributes are missing from the TCO information. We investigate how the provision of TCO information affects attribute weights, and how this effect is moderated by the Comprehensiveness of quantification and the decision-maker’s experience. We
conducted experiments with 817 participants, both students and managers. We found that student participants were more inclined to give a higher weight to the attribute missing from the TCO information, while the practitioner participants tended to give less weight to the missing attribute. Within the group of practitioners, the pattern was strongest for the most experienced practitioners. The
results suggest that experienced decision makers might be less mindful of the imperfections of monetary quantification.