Case Study 10-1, Troon Golf Example | Topics and Well Written Essays - 500 words

10-1, Troon Golf - Case Study Example The increasing difference in between IT cost and the purchase price forced the management to put in place TCO. At optimal level, the analysis of TCO supported the acquisition and planning decisions for the firm’s assets bringing a significant maintenance and operating cost over a significantly long usable life. Therefore, the use of TCO helped the firm in quantifying and measuring its costs. Further, it impacted commercial negotiations through the expansion of narrow confines of the IT prices to a large area of opportunities thus eventually allowing management to refresh its hardware at the optimal cost level. Some costs in the firm are purely variable while others are fixed thus displaying no correlation to levels of output. Expenses in the firm spiraled out due the fact that the firm had long-term plans that make it impossible to account for hybrid expenses occurring. Whenever a firm does not estimate accurately the step fixed costs, it is possible that the expenses spiral will be dramatic. Further still, the management of the firmed lacked enough experience and proper accounting skills thus estimation of costs was a problem until Cary Westmark intervened with a new idea. The firm should have decided to hire an independent consultant to ensure that costs are properly estimated. This is event since the firm’s support costs were seen to increase within the projected life of IT, which consequently led to the increase in the expenses. This means that were it not for the technology Vice President, Mr. Westmark, who introduced TCO, the expenses would have continued to increase thus lea ding the firm to a shut down position. Example of hidden cost will include damage to machines by a worker and time lost by a worker, which could have been as a result of supervisor responding to a injury-causing incident. The cost incurred when hiring and training either a temporary of a