Certified Facility Manager (CFM) Practice Exam

The concept of 'total cost of ownership' (TCO) is essential in facility management as it encompasses all costs associated with an asset throughout its entire lifecycle, rather than only considering the initial purchase price. This approach ensures that facility managers evaluate not just the upfront costs but also ongoing expenses such as maintenance, operation, and eventual disposal or replacement of the asset.

By emphasizing the total costs incurred over time, decision-makers can make informed choices that align with long-term financial efficiency and sustainability. This comprehensive perspective can lead to better budgeting, more effective resource allocation, and the identification of opportunities for cost savings, enhancing the overall value derived from assets. An understanding of TCO can lead to improved operational strategies and ultimately contribute to the effective management of the facility as a whole.