life cycle cost analysis example

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. However lcca should not be used for the purpose of budget allocation. Sometimes known as whole cost accounting or total cost of ownership lcca balances initial monetary investment with the long term expense of owning and operating the building.
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What is life cycle cost analysis. The life cycle analysis methodology evaluates the energy requirements environmental impacts and life cycle costs of a process or product by quantifying all the material inputs and outputs and their respective energy and. Equipment life cycle cost analysis lcca is typically used as one component of the equipment fleet management process and allows the fleet manager to make equipment repair replacement and retention decisions on the basis of a given piece of equipment s economic life.

Lcca is a process of evaluating the economic performance of a building over its entire life.

Life cycle cost analysis example. Life cycle cost analysis is ideal for estimating the overall cost of a project s alternatives. Goal and scope aims to define how big a part of product life cycle will be taken in assessment and to what end will assessment be serving the criteria serving to system comparison and specific times are described in this step. The objective of this research is to develop a robust method that. By using the simplifi ed formula explained in this report for small decisions and the free software identifi ed in this report for large decisions forest service.

The life cycle inventory analysis lci looks at the environmental inputs and outputs of a product or service. In this step inventory analysis gives a description of material and energy flows within the product system and. Understanding life cycle cost analysis. Life cycle assessment or lca also known as life cycle analysis is a methodology for assessing environmental impacts associated with all the stages of the life cycle of a commercial product process or service.

An lca study consists of four stages. In phase 1 we defined the buckets we want to put our data in in phase 2 we fill the buckets. For example for a highway pavement in addition to the initial construction cost lcca takes into account all the. Look at it as buckets.

For example lcca helps to determine which of the two alternatives will raise the initial cost but will reduce the operating cost. It is essentially the data collection phase of our lca. Life cycle analysis lca is a general term that has many names such as life cycle assessment and cradle to grave analysis. Life cycle cost analysis is a structured method of determining the entire cost of a structure product or component over its expected useful life by adding the cost of operating maintaining and using it to the purchase price.

Life cycle cost analysis lcca method the purpose of an lcca is to estimate the overall costs of project alternatives and to select the design that ensures the facility will provide the lowest overall cost of ownership consistent with its quality and function. For instance in the case of a manufactured product environmental impacts are assessed from raw material extraction and processing cradle through the product s manufacture.