Total cost analysis in purchasing education: A two-step open-ended teaching case approach

Total Cost Analysis, TCA, is an approach to handle all relevant costs in decisions concerning a choice between alternatives. Although TCA is considered important within Purchasing and SCM, there is little guidance on how to perform such analyses in a structured way. This is challenging to total cost analysts, but also to teachers wanting their students to learn TCA, especially since there is also a lack of guidance in literature on how to promote students' learning of TCA.

Based on experiences from a teaching case on supplier selection used in master's level education for several years, this paper presents a two-step teaching case approach which can serve as inspiration for teaching and learning TCA in a way that promotes students to be critical and engaged learners. In the two-step procedure, students first define which cost factors are relevant for the specific situation and which data they need to perform the TCA. Second, provided with requested data, they perform the TCA and evaluate their solution's robustness.

The proposed two-step model is novel, thereby adding to the case teaching literature. Moreover, the study adds to the scarce amount of research on purchasing education, as well as to the limited amount of literature on teaching and learning total cost analysis in general.