What is lifecycle costing of the project?

Life Cycle Costing (LCC) is an important economic analysis used in the selection of alternatives that impact both pending and future costs. It compares initial investment options and identifies the least cost alternatives for a twenty year period.

It is a total cost of the project spend over the lifetime of the project.

It is a technique which takes account of the total cost owing a physical asset or making a product during its economic life

This Life Cycle Costing Tool has been developed to assist asset managers in decision making based on performing a systematic assessment of the life cycle costs of selected water and wastewater assets.

Owners, users and managers need to make decisions on the acquisition and ongoing use of many different assets including items of equipment and the facilities to house them. The initial capital outlay cost is usually clearly defined and is often a key factor influencing the choice of asset given a number of alternatives from which to select.

The initial capital outlay cost is, however, only a portion of the costs over an asset’s life cycle that needs to be considered in making the right choice for asset investment. The process of identifying and documenting all the costs involved over the life of an asset is known as Life Cycle Costing (LCC).

The total cost of ownership of an asset is often far greater than the initial capital outlay cost and can vary significantly between different alternative solutions to a given operational need. Consideration of the costs over the whole life of an asset provides a sound basis for decision-making. With this information, it is possible to:

• Assess future resource requirements (through projection of projected itemized line item costs for relevant assets);
• Assess comparative costs of potential acquisitions (investment evaluation or appraisal);
• Decide between sources of supply (source selection);
• Account for resources used now or in the past (reporting and auditing);
• Improve system design (through improved understanding of input trends such as manpower and utilities over the expected life cycle);
• Optimize operational and maintenance support; through more detailed understanding of input requirements over the expected life cycle)
• Assess when assets reach the end of their economic life and if renewal is required (through understanding of changes in input requirements such as manpower, chemicals, and utilities as the asset ages).

It is the entire cost covering all phases of the project from being a concept, feasibility study, pre-tender, tender, contracting, execution, operation and maintenance.

it is the cost estimated from initiating a projec till its end of life

It ss a method of including all of the cost associated with the project over its entire life..

Life-cycle cost analysis (LCCA) is a method for assessing the total cost of facility ownership. It takes into account all costs of acquiring, owning, and disposing of a building or building system.

Lifecycle costing of the project defines the impact of current and future cost with respect to ROI, to extract the same we need to do present value analysis.