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Life Cycle Costing

Process

LIFE CYCLE COSTING SIX STAGE PROCESS.

CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME

Life Cycle Costing Process


Stage 1
Plan LCC Analysis

Process

Define the analysis Objectives in terms of outputs required to assist management decisions . Define Scope of Analysis . Identify Underlying conditions,assumptions,limitations and constraints . Identify alternative courses of actions. Provide an estimate of resources required and reporting schedulefor the analysis .

Life Cycle Management Navigator: 12_PR_LCC 2

CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME

Life Cycle Costing Process


Stage 2
Select / Develop LCC Model

Process

Create or Adopt cost breakdown structure identifying relevant cost strategies . Select method for estimating cost associated with each cost element . Determine data required to develope the estimates. Identify uncertainties Review

Life Cycle Management Navigator: 12_PR_LCC 3

CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME

Life Cycle Costing Process


Stage 3
Apply LCC Model Obtain data and develop Cost Estimates . Validate the LCC Model with Historical data . Obtain LCC Model results Identify Cost Drivers Quantify any differences (In Performance,availability etc.)

Process

Conduct Sensitivity Analysis Review Outputs .

Life Cycle Management Navigator: 12_PR_LCC 4

CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME

Life Cycle Costing Process


Stage 4
Document And Review LCC Results Executive Summary Purpose and Scope LCC Model Description Discussion Conclusions and Recommendations

Process

Life Cycle Management Navigator: 12_PR_LCC 5

CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME

Life Cycle Costing Process


Stage 5 &6
Prepare Life Cycle Cost Analysis

Process

Review and Developement of LCC Model as a real-time cost control mechanism Targets set for operating costs and their frequency of occurance Implement And Monitor Life cycle cost analysis Continuos monitoring of actual performance of asset during Operation and maintenance to identify areas for cost saving. Feedback for future life cost planning activities

Life Cycle Management Navigator: 12_PR_LCC 6

CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME