Archive for October, 2011

In making major purchases, the popular tendency is to solicit multiple bids in an effort to obtain the lowest price.  That lowest price, however, comes at a price.  I have to say that seeking the lowest price isn’t always the most economical in the long term.  In fact, the opposite is often true.  The life cycle cost of any purchase should be considered.

 Several years back, a major local subdivision opened up to cater to mid to upper middle class families.  In the interest of appearing to deliver a lot of square feet for the dollar, several decisions were made, including installation of the least expensive windows the builders could find.  Within five years, many of the homeowners were replacing their windows.

 Now, what is economical?   On the surface, saving about twenty five percent on the windows at the time of construction enabled the builders to sell at low dollars per square foot.  Presumably this savings was passed on to the consumer.  The actual cost of this is an initial savings of 25% to install a cheap window plus the cost of a quality replacement window, plus the labor to remove and replace the windows when they fail.  So if the cost of the initial windows was .75X, the real cost within a few years becomes .75X plus X plus 2L (labor to remove and replace the windows) plus W (the cost of wasted energy) or 1.75X + 2L + W.

 This is but one example.  When making a major purchase, consider the long term cost of ownership before making a decision.  Premature replacement is far from sustainable.

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