Rebuilding Barcelona’s TCO

Rebuilding Barcelona’s TCO – and Correcting the Split

Ada re-derives this chapter’s own numbers step by step, at full precision

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Ada ADA · CALCULATION AUDIT

Rebuilding Barcelona's TCO -- and Correcting the Split

Barcelona’s five-year total cost of ownership for 3,800 smart-parking sensors comes to $2,699,700, or $710 per sensor — a figure the audit reproduces line by line. But the chapter then reads that total as “38% initial investment, 62% ongoing,” a split the numbers underneath it do not support. So does the 38/62 split actually match the line items, or has it been inverted?

Companion to the chapter Lessons from Real Deployments — every number here comes from that chapter.

See the relationship before changing it

The figure reads from left to right. The blue card is operating horizon. The middle card applies the page rule. The green card is total cost. Walk the arrows once: set the input, apply the rule, then read the result with its unit.

Operating horizon changes total cost An input card leads through the rule TCO = 1.518 million + 0.23634 million/year x years to the total cost result. INPUT PAGE INPUT APPLY THE RULE predict calculate check units OUTPUT RESULT
Walk the arrows. A longer operating horizon makes recurring cost impossible to hide behind year zero.

Derive the baseline in four named moves

  1. 1

    Name the input. The chapter baseline is 5 years.

  2. 2

    Name the relationship. TCO = 1.518 million + 0.23634 million/year x years

  3. 3

    Substitute with units. 1.518 + 0.23634 x 5 = 2.700 million USD

  4. 4

    Read the result. Keep the unit beside the value. Use it only inside the technical boundary on this page.

Predict, then change operating horizon

Try Predict the direction of TCO = 1.518 million + 0.23634 million/year x years. Test another operating horizon, then compare total cost.

5 years
Chapter baseline
Total cost

Observe A longer operating horizon makes recurring cost impossible to hide behind year zero. Reset operating horizon to 5 and compare total cost.

Explain A longer operating horizon makes recurring cost impossible to hide behind year zero.

Check yourself

What should you do before trusting a moved-control result?
Answer: Predict its direction, apply the shown relationship, keep the units, and reset to the worked baseline.
What does this small model leave out?
Answer: Only operating horizon moves here. Field effects named in the technical boundary stay fixed.

Honesty note. This teaching model changes only operating horizon. It is not a field prediction.

TryLoad the five-year ledger for 3,800 parking sensors and press Check derivation after summing its $1,518,000 initial cost.
ObserveTotal ownership remains $2,699,700, but the share display resolves to 56.2% initial and 43.8% recurring rather than 38/62.
ExplainThe published split is inverted because dividing each ledger subtotal by the same total makes the larger $1.518M initial subtotal the majority share.

Ada: The Barcelona five-year total-cost-of-ownership example lands on $2,699,700, and I can reproduce that exactly from its line items. But the sentence that interprets it – “38% initial investment, 62% ongoing” – does not match the numbers it describes, so I will rebuild the whole thing and correct the split.

  • Year 0: 3,800 x 250 + 3,800 x 2 x 50 + 19 x 2,000 + 150,000 = 950,000 + 380,000 + 38,000 + 150,000 = 1,518,000.
  • Annual operating: 15,200 + 6,840 + 22,800 + 25,000 + 65,000 = 134,840; annual hidden: 66,500 + 5,000 + 12,000 + 18,000 = 101,500; combined 236,340 per year.
  • Five-year TCO: 1,518,000 + 236,340 x 5 = 1,518,000 + 1,181,700 = 2,699,700, i.e. 2,699,700 / 3,800 = 710 per sensor. Both match the chapter.
  • The split, though: initial is 1,518,000 / 2,699,700 = 56.2% and the five years of operating-plus-hidden are 1,181,700 / 2,699,700 = 43.8%.

So the chapter’s “38% initial / 62% ongoing” is inverted – initial cost is actually the larger share here, about 56%, a correction the page’s own calculator confirms when it reports operating at 44% of TCO. The design meaning survives the fix but shifts emphasis: over a five-year horizon this deployment splits roughly 56/44, so a budget that under-provisions the recurring ~$236k/year still under-funds nearly half the lifetime cost – exactly the “run out of funding in Year 2-3” trap the chapter warns about.

Technical boundaries
The Barcelona TCO deliberately does not simulate discounting, inflation, tax, downtime, replacement uncertainty, financing, or changing service prices; it sums the stated initial and five annual cost ledgers.

Work the audit first, then check the displayed derivation.

Every number above is taken from the chapter’s own material and re-derived step by step.