True or False: Supply should focus solely on the lowest purchase price without considering total cost of ownership.

The statement that supply should focus solely on the lowest purchase price without considering total cost of ownership is false. In supply management, the lowest purchase price is just one aspect of the overall cost consideration. Total Cost of Ownership (TCO) takes into account all costs associated with acquiring and using a product or service throughout its life cycle, which may include purchase price, installation, maintenance, training, disposal, and other operational costs.

Focusing solely on the lowest purchase price can lead to decisions that may not be cost-effective in the long run. For example, a cheaper item might have higher maintenance costs or a shorter lifespan, leading to more frequent purchases, which ultimately increases overall expenditures. A comprehensive analysis that includes TCO ensures that organizations make informed and strategic purchasing decisions that enhance long-term value and efficiency. This approach reflects a more holistic view of supply management, aligning purchasing strategy with overall business objectives.