Table of Contents
How is life cost analysis prepared?
The first stage is life cost planning stage which includes planning LCC Analysis, Selecting and Developing LCC Model, applying LCC Model and finally recording and reviewing the LCC Results. The Second Stage is Life Cost Analysis Preparation Stage followed by third stage Implementation and Monitoring Life Cost Analysis.
What is LCC method?
Life cycle cost (LCC) is an approach that assesses the total cost of an asset over its life cycle including initial capital costs, maintenance costs, operating costs and the asset’s residual value at the end of its life.
Why functional unit is important in LCA?
The functional unit is a key element of LCA which has to be clearly defined. The functional unit is a meas- ure of the function of the studied system and it provides a reference to which the inputs and outputs can be related. This enables comparison of two essential different systems.
What is life cycle costing process?
Lifecycle costing is the maintenance of physical asset cost records over entire asset lives. This means decisions around the acquisition, use or disposal of assets can be made in a way that achieves the optimum asset usage at the lowest possible cost to the entity.
What is life cycle cost analysis (LCCA)?
LCCA considers all the costs associated with obtaining, owning, and disposing of an investment. Life cycle cost analysis is especially useful where a project comes with multiple alternatives and all of them meet performance necessities, but they differ with regards to the initial, as well as the operating, cost.
Is lifecycle costing a good measure of cashflow?
Both these situations remain unchallenged where behaviour is driven by a narrow focus on direct costs. Lifecycle costing, combining capital and multi-year operating costs into a holistic measure of cashflow, is well known but it is often seen as a complex, difficult to apply financial analysis tool.
Are lifecycle cost models an approximation of the real world?
Naturally it is useful to have an understanding of the total cost implications of any decision, but lifecycle cost models present an approximation of the real world. Those that approach LCC analysis seeking a precise forecast of future costs will be disappointed.
How is life cycle cost analysis implemented in the PDP?
IMPLEMENTING THE LIFE CYCLE COST ANALYSIS PROCESS AT STANFORD Life Cycle Cost Analysis will be implemented within the existing nine-phase PDP. Section III discusses in detail how to address LCCA at each stage. LCCA adds two major activities to the PDP: O&M Cost Benchmarking and Comparative Analysis.