Life Cycle Costing

For example think of a car.

Life cycle costing. Whole-life costing covers an assets costs from the time you purchase it to the time you get rid of it. Life-cycle costing LCC is a term commonly used to describe a general method of economic evaluation by which all relevant costs over the life of a project are accounted for when determing the economic efficiency of the project. LCCA is especially useful when project alternatives that fulfill the same performance requirements but differ with respect to initial costs and operating costs have to be compared in order to.

Life-cycle cost analysis LCCA is a tool to determine the most cost-effective option among different competing alternatives to purchase own operate maintain and finally dispose of an object or process when each is equally appropriate to be implemented on technical grounds. The BCIS Life Cycle Evaluator makes this easier than ever. Life cycle costing is the process of compiling all costs that the owner or producer of an asset will incur over its lifespan.

The cars price tag is only part of the cars overall life cycle cost. Life-Cycle Costing Accurate cost measurement is one of the most important requirements of a successful VE program. Purchase price and all associated costs delivery installation insurance etc Operating costs including energy fuel and water use spares and maintenance.

There is often pressure to reduce costs and or prove value for money. The company wants to make a profit in the long term not only one or two years so tracking the profit of each product is very important. Life Cycle Costing is a method that aggregates all costs that an organisation or individual will incur over the life span of the asset project investment etc.

It includes both the initial investment non-recurring expense along with any further investment such as operating cost maintenance and repair upgrades recurring expense. These costs include the initial investment future additional investments and annually recurring costs minus any salvage value. The cost modelling is done in phases which normally stretch from the idea to start the venture until its shutdown or decommissioning of the assets.

Through LCC one seeks to minimize the cost of obtaining a cer- tain level of output. Life-cycle cost analysis LCCA is a method for assessing the total cost of facility ownership. Life cycle costing involves tracing cost and revenues on a product by product base over several calendar periods.