Life Cycle Cost Analysis (LCCA)

In summary, the conversation is about LCCA and the speaker is new to the topic and has some questions. They are wondering if it involves calculating costs for two projects and comparing them, and if there are more complex examples available. They also ask if there are examples where costs are uncertain. The provided link is an example of a more complicated LCCA.
  • #1
Petr Mugver
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0
Hi all, for job reasons I have come across LCCA, and I have started documenting myself reading this ebook that I found googling: Fuller-Petersen, LCCA. Now, I'm new to the topic, and I have a few questions:

1) Is it just about calculating all the costs of two projects, maybe taking inflation and such into account for investments at different times, and comparing the two results?

2) Can anyone give me a link to a more complicated example, for instance a LCC example in which one or more continuous variables label the different projects to be compared, so that a minimum of calculus has to be used? Or

3) an example in which one or more of the costs summing up to give the expected investments are aleatory variables?

Thanks
 
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FAQ: Life Cycle Cost Analysis (LCCA)

What is Life Cycle Cost Analysis (LCCA)?

Life Cycle Cost Analysis (LCCA) is a method used to estimate the total cost of a product or system over its entire lifespan. It takes into account all costs associated with the initial purchase, operation, maintenance, and disposal of the product or system.

Why is LCCA important?

LCCA is important because it allows for a more comprehensive evaluation of costs associated with a product or system. It takes into account not only the initial purchase price, but also the long-term costs, which can impact decision making and help identify the most cost-effective option.

What factors are considered in LCCA?

LCCA takes into account a variety of factors, including initial costs, maintenance and repair costs, energy costs, and disposal costs. It also considers the time value of money, as future costs are discounted to their present value.

What are the limitations of LCCA?

One of the main limitations of LCCA is that it relies on assumptions about future costs and events, which may not always be accurate. Additionally, LCCA does not consider non-monetary factors, such as environmental impact or societal costs.

How is LCCA used in decision making?

LCCA is used in decision making by comparing the life cycle costs of different options and selecting the most cost-effective one. It can also help identify areas where costs can be reduced or optimized over the lifespan of a product or system.

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