Decisions based on initial price

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last updated: 30th June 2011

The main consequence of making procurement decisions based on an initial price basis is that the institution may not get best value for money in the long run. An item with a low capital cost may turn out to have higher running costs or a shorter life than an alternative with a higher capital cost.  In this case, the whole life costing of the apparently cheaper option may be considerably more than the alternative.

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