StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

A Life Cycle Cost Analysis - Essay Example

Cite this document
Summary
From the paper "A Life Cycle Cost Analysis" it is clear that design optimization on a cost basis is also carried out under LCCA to hit upon the model, which would lead to higher performance at lower costs and competitiveness in a systematic and efficient manner. …
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER95.9% of users find it useful
A Life Cycle Cost Analysis
Read Text Preview

Extract of sample "A Life Cycle Cost Analysis"

A life cycle cost analysis calculates the cost of a system or product over its entire life span. This also involves the process of Product Life Cycle Management so that the life cycle profits are maximized.
The analysis of a typical system could include costs for:
• planning,
• research and development,
• production,
• operation,
• maintenance,
• Cost of replacement,
• disposal or salvage.
This cost analysis depends on values calculated from other reliability analyses like failure rate, cost of spares, repair times, and component costs.

Risk Analysis, Sensitivity Analysis, and Optimization

Performing an LCCA(Life Cycle Cost Analysis) in the design stage itself makes sure that a project that is economical from all aspects, in the long run, is chosen. Yet, there may l be some uncertainty associated with the LCC results. LCCAs are usually performed early in the design process when only estimates, rather than exact amounts of costs and savings are available. Uncertainty in input values means that actual outcomes may differ from estimated outcomes.

There are techniques for estimating the cost of choosing the "wrong" project alternative. Deterministic techniques, such as sensitivity analysis or breakeven analysis, are easily done without the need for additional resources or information. They produce a single-point estimate of how uncertain input data affect the analysis outcome. Probabilistic techniques, on the other hand, quantify risk exposure by deriving probabilities of achieving different values of economic worth from probability distributions for input values that are uncertain. However, they have greater informational and technical requirements than deterministic techniques. Whether one or the other technique is chosen depends on factors such as the size of the project, its importance, and the resources available. Since sensitivity analysis and break-even analysis are two approaches that are simple to perform, they should be part of every LCCA.

Sensitivity Analysis
Sensitivity analysis is the technique recommended for energy and water conservation projects by FEMP. Sensitivity analysis is useful for:
• identifying which of several uncertain input values has the greatest impact on a specific measure of economic evaluation,
• determining how variability in the input value affects the range of a measure of economic evaluation, and
• testing different scenarios to answer "what if" questions.
To identify critical parameters, arrive at estimates of upper and lower bounds, or answer "what if" questions, simply change the value of each input up or down, holding all others constant, and recalculate the economic measure to be tested.


Safety, reliability, and cost efficiency can be achieved through design optimization in the pre-launch phase itself. Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Cost Life Cycle Essay Example | Topics and Well Written Essays - 750 words”, n.d.)
Cost Life Cycle Essay Example | Topics and Well Written Essays - 750 words. Retrieved from https://studentshare.org/miscellaneous/1505736-cost-life-cycle
(Cost Life Cycle Essay Example | Topics and Well Written Essays - 750 Words)
Cost Life Cycle Essay Example | Topics and Well Written Essays - 750 Words. https://studentshare.org/miscellaneous/1505736-cost-life-cycle.
“Cost Life Cycle Essay Example | Topics and Well Written Essays - 750 Words”, n.d. https://studentshare.org/miscellaneous/1505736-cost-life-cycle.
  • Cited: 0 times

CHECK THESE SAMPLES OF A Life Cycle Cost Analysis

Life Cycle Analysis

This case study "life cycle Analysis" discusses life cycle Analysis that does not suggest favorable signs for the company.... The life cycle Analysis or Assessment is the investigation and it is a means by which we evaluate the true worth of the company to society.... The first thing that is used in the life cycle analysis is determining the goal and scope of this analysis.... The next step is called life cycle Inventory Analysis....
5 Pages (1250 words) Case Study

The Roles of Product Life Cycle

The author of this study "The Roles of Product life cycle" touches upon the concept of production.... The main objective of product policy is to evaluate the risks and hazards that a product can cause during its life cycle by incorporating all the phases of product development, the possible players, trade policy and procurement, economic instruments, materials regulations, inter-trade agreements, environmental and labeling laws, and product design (Charter & Tischner, 2001)....
8 Pages (2000 words) Case Study

Product Life-Cycle Costing

ife cycle costs cover all the costs that the manufacturer will have to incur and the whole life cycle cost includes the costs at the hands of the consumer like installation, operation, maintenance, revitalization, and disposal (Shields & Young 1991.... The paper "Product Life-Cycle Costing" highlights that when the product life cycle costing is successfully implemented in an organization, it can bridge the information gap between the functional departments responsible for purchasing budgets and maintaining operating costs....
6 Pages (1500 words) Essay

Analysis Phase Of System Development Life Cycle

Here system development life cycle is a group of activities those are aimed to develop the whole project.... In addition, this report presents detailed and comprehensive analysis of implementation of an IS (information system) and critically assess the analysis phase of the overall SDLC (software development lifecycle) of this information system for the ABC Company.... The analysis phase of the SDLC is the initial phase of system development....
14 Pages (3500 words) Thesis

Marketing Planning Assessment: Midland Cycles

The business plan titled "Marketing Planning Assessment: Midland Cycles" The cycle industry has experienced relatively explosive sales growth both in Europe and North America since 1998 (Financial Times, 1998).... Much of this growth can be attributed to changing social attitudes regarding cycle recreation as well as clever and innovative marketing efforts which focus not only on the product and its attributes but is used to relate to lifestyle preferences of the cycle industry's intended market segments....
11 Pages (2750 words) Business Plan

Product Life Cycle and Cost Recovery Performance

This literature review "Product life cycle and Cost Recovery Performance" discusses the Product life cycle (PLC).... The inputs and processes that each functional department of a business such as the financial, human resource, manufacturing, marketing and the Supply chain departments, vary at each different stage of the Product life cycle.... The product life cycle consists of 4 phases.... he very first stage of the product life cycle, that is the introduction (development) stage, substantial costs are incurred on research and development backed by continuous market research to gauge where the brand positioning is going....
6 Pages (1500 words) Literature review

Whole-of-Life Cycle Costs of Engineered Products and Infrastructure

The paper "Whole-of-life cycle Costs of Engineered Products and Infrastructure" states that it is difficult to determine the discount rate as management needs to compare the nominal value and discounted value.... life cycle estimate can be amorphous as a cost management approach where all costs related to the product life cycle are properly managed over the life cycles of a given product or project.... Elements of life cycle costing one of the main reasons of calculating this technique is mostly to analyze all the costs that have to be a bear by the corporation in possessing a new asset (Deardorff, A....
6 Pages (1500 words) Report

Critical Analysis of Life Cycles Analysis

life cycle Analysis (LCA) refers to the process that scrutinizes the environmental influences of a product by considering the important production stages.... life cycle Analysis (LCA) refers to the process that scrutinizes the environmental influences of a product by considering the important production stages.... 1), the scope of the LCA should focus on the definition of the scope and goal LCA, LCI phase, LCIA phase, interpretation of life cycle phase, as well as recording and critical evaluation of the report....
7 Pages (1750 words) Literature review
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us