For years, most have focused on two main drivers while making procurement decisions for any tangible or intangible asset. The first is the design of the asset in terms of functional requirements, aesthetics, and comfort of use. The second factor is the cost of acquisition and installation of the asset. A third factor that has recently begun to gain greater awareness is the operating cost of the asset in use. The operating cost includes operations, maintenance, repair, and replacement costs. It has been observed that in most cases, the cumulative operating cost is significantly high over a period of time compared to the initial procurement and installation cost. In addition, users are concerned with the cost of disposal and the residual value of a property at the end of its use. The sum of the initial and operating costs of an asset, including all other associated costs throughout its useful life, is known as life cycle costs. Life cycle cost analysis (LCCA) is an economic approach used to assess the total cost of owning an asset or facility. The LCCA concept has grown in popularity as awareness of the cost of ownership increases. With the growing awareness of environmental costs, including carbon and health costs, the importance of LCCA is increasing dramatically. This book illustrates the concept and methodology of the LCCA. The methodology described in the book is a simple arithmetic model which can be used by all for any application. Also, the book explains a unique methodology to demonstrate how the value of money changes over a period of time when inflation plays a major role. The book provides working knowledge to all professionals and researchers on how to analyze life-cycle costs and prepare the LCCA report. The book explains why LCCA is a key economic tool for business decision-making in terms of sustainability, asset management, supply chain management and project management. Initial acquisition and installation costs are said to be the tip of the iceberg for the entire lifecycle cost of an asset. To make the right decision to acquire an asset, a thorough analysis must be done to assess the life-cycle cost of owning the asset. It is time to understand the lifecycle costing process and implement it in a simplistic and logical manner so that all stakeholders are on the same page.
Acknowledgments
About the Author
Introduction
Chapter 1 : Overview
Chapter 2 : Purpose of Life Cycle Cost Analysis
Chapter 3 : LCCA Methodology
Chapter 4 : Case Study for Life Cycle Cost Analysis
Chapter 5 : Salvage Value
Chapter 6 : Sample Life Cycle Cost Analysis Report
Chapter 7 : Project Management Decision
Chapter 8 : Impact of Life Cycle Cost Analysis
Chapter 9 : Life Cycle Cost Analysis Experiences
References
Index
