The whole life cost wlc of an asset is defined as the present value of the total cost of that asset over its operating life including initial capital cost, maintenance and replacement cost, energy cost and the cost or benefit of the eventual disposal of the asset at the end of its life. In the modern world clients need to understand how sustainable their. Document downloads whole life and life cycle costing isurv. Lcc has a number of relevant applications, these include. Wholelife costing covers an assets costs from the time you purchase it to the time you get rid of it. Original model for estimating the whole life costs of. Information about wholelife costs will be prepared by different people at different stages of the project. This selfcentred vision is also present in the plc product life cycle costing or cost of the product life cycle concept, which is firmly anchored in product.
Using whole life costing and lifecycle assessment for. The optimization of the lifecycle cost of a project, construction, and. The process of life cycle costing lcc fundamentally involves. Whole life costing who should read this fact sheet. The principles and process for conducting a lifecycle. Whole life cycle costing wlcc is rapidly becoming the standard method for the longterm cost appraisal of buildings and civil infrastructure projects. The model for estimating the whole life costs of the building life cycle that allows the quantification of the risk addition lets the investor to compare buildings at. With clients now demanding buildings that demonstrate value for money over the long term, wlcc has become an essential tool for those involved in the design, construction, operation and risk analysis of construction projects.
Life cycle costing is the process of economic analysis that assesses the total cost of investment in and owner ship and operation of the system or product to. Life cycle costing is a system that tracks and accumulates the actual costs and revenues attributable to cost object from its invention to its abandonment. Hence, any work on whole life costing needs to be fully embedded in those developments the project has identified the main goals and activities for phase 2. Life cycle costing lcc, by definition, refers to an analysis technique which encom passes all costs associated with a product from its inception to its disposal. Life cycle costing how to calculate life cycle cost of. With clients now demanding buildings that demonstrate. Life cycle costing for facilities download ebook pdf. Executive order 123 requires government agencies to use life. Life cycle costing for engineers download ebook pdf. Lifecycle costing shall, to the extent relevant cover parts or all of the following costs over the life cycle of a product, service or works. Manufacturers would base life cycle costing expense allocations on an expected number of units to be sold over the products life. Using whole life costing and lifecycle assessment for sustainable hospital building design client skanska kvaerner construction project kvaerner construction was invited to tender for a new hospital building.
Life cycle costing is not yet considered to be a critical component of. Life liftin g fact or fact ored life real base lcc e i spv facto r sca factor nominal escalate d lcc present value discount ed lcc cur % cost plan items x. Wholelife cost is the total expense of owning an asset over its entire life, from purchase to disposal, as determined by financial analysis. Whole lifecycle costing wlcc is rapidly becoming the standard method for the longterm cost appraisal of buildings and civil infrastructure projects. Life cycle costing how to calculate life cycle cost of product. Life cycle cost lcc is an important technique for evaluating the total cost of ownership between mutually exclusive alternatives. Life cycle costing, or wholelife costing, is the process of estimating how much money you will spend on an asset over the course of its useful life. If the contract did not include this, but there existed a separate waste management contract, impacts on this contract costs, arising from the design, scale and use of furniture should be considered not relevant for new furniture in the case of option b. While the term of a total cost of ownership tco is applied in the recent. Private clientswho intend to own a property over a longterm period also want to understand the full cost of that ownership. Whole of life cycle cost analysis in bridge rehabilitation v executive summary the report presents a methodology for whole of life cycle cost analysis of alternative treatment options for bridge structures. Wlcc in buildings whole life cycle costing is a relatively new concept in construction, although this concept is based on. Life cycle costing helps companies to be aware of where their products are in their life cycles, because in addition to the sales effects, the lifecycle stage may have a tremendous impact on costs and profits.
Working group on whole life costing introduction whole life costing wlc is the methodology for systematic economic consideration of all wholelife costs and benefits over a period. Assessing costs arising from an asset over its projected life cycle. Wholelife costing is a process of providing information about the likely life of a project to enable decisions to be made about value for money in the planning stages. Life cycle costing lcc is the consideration of all relevant costs and revenues associated with the acquisition and ownership of an asset. Definition, objectives and benefits of life cycle costing lcc 2. Wholelife cost, or lifecycle cost lcc, refers to the total cost of. Lifecycle 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. Risk analysis in the theory of whole lifecycle costing. With clients now demanding buildings that demonstrate value for money over the long term, wlcc has become an essential tool for those involved in the design, construction, operation and risk. Ethicsengineering concepts and principles of lcc and effectivenessethics 039. Whole life costing is relevant when considering whole estates, whole facilities, individual buildings or structures and when comparing alternative investment scenarios such as. Wholelife cost is the total cost of ownership over the life of an asset. The whole life cost wlc of an asset is defined as the present value of the total cost of that asset over its operating life including initial capital cost.
It takes into account all costs of acquiring, owning, and disposing of a building or building system. The australian and new zealand standard life cycle costing an application guide asnzs 4536. Concepts and principles of life cycle cost lcc and. It used to be the case that once a project was built that was all that mattered. Life cycle costing lcc is defined in the international organization for standardization standard, buildings and constructed assets, servicelife planning, part 5. The factors affecting the investment life of a project 3. Life cycle costing lcc is a technique to estimate the total cost of ownership.
The concept is also known as lifecycle cost lcc or lifetime cost, and is commonly referred to as cradle to grave or womb to tomb. Watch this video to learn the life cycle costing technique in few minutes. Utilising life cycle costing and life cycle assessment. Wholelife costs for buildings wlc designing buildings wiki. The lifecycle impact on each of these items is shown in exhibit 17. Pdf life cycle cost lcc is an important technique for evaluating the total cost of ownership between mutually exclusive alternatives. Life cycle costing adds all the costs over their life period and enables an evaluation on a common basis for the specified period usually discounted costs are used. Click download or read online button to get life cycle costing for.