Final answer:
Supplier performance should be compared based on the impact on the total cost of ownership. In many instances, a higher acquisition cost is more than compensated for by lower ownership and post-ownership costs. The statement is true.
Step-by-step explanation:
When comparing supplier performance, it is important to consider the impact on the total cost of ownership. This includes not only the acquisition costs but also the ownership and post-ownership costs. In many cases, a higher acquisition cost can be offset by lower ownership and post-ownership costs.
For example, let's say there are two suppliers offering the same product. Supplier A has a lower acquisition cost, but higher ownership and post-ownership costs, such as maintenance and repair expenses. Supplier B, on the other hand, has a higher acquisition cost, but lower ownership and post-ownership costs. If we only focus on the acquisition cost, it may seem that Supplier A is the better option. However, when we consider the overall cost of ownership, including maintenance and repair expenses, Supplier B may actually be the more cost-effective choice.