Life cycle cost (LCC) is defined as the cost of an asset or its parts throughout its life cycle while fulfilling the needed performance.
Whole life cost (WLC) is the total of all substantial and relevant initial and future costs and benefits of an asset throughout its life cycle while fulfilling the performance requirements.
Life cycle costing is the process of systematic economic evaluation of life cycle costs over a period of analysis, as defined in the agreed scope. Whole life costing is the process of systematic economic consideration of all whole life costs and benefits over a period of analysis, as defined in the agreed scope.
The above definitions are extracted from BS ISO 15686-5.
Whole life costs include life cycle costs plus non-building costs such as site costs, financing costs, rental costs, etc., and incomes such as income from sales, loss of income, etc. as a result, whole life costs relate to the overall development, whereas life cycle costs relate only to the building.
Life cycle costs include several items, which may be classified in various ways. The figure below illustrates the costs associated with each category.
building costs are further divided into two categories:
This cost incorporates
These costs are generated during the initial building phase, but the client will not incur any subsequent life cycle costs. These costs include:
The following diagram illustrates the typical distribution of maintenance expenditure in a modern air-conditioned office building. Maintenance cost includes any work undertaken to prolong the life of a building or part thereof. This shows that 66% of the total expenditure relates to services installations.
Maintenance cost includes:
When repairs are no longer viable, a replacement will be needed, for instance:
Other costs to be considered in the maintenance cost category are:
The operation costs to be considered include:
The types of occupancy costs included will depend on the use of the building. A few examples are given below: There is an extensive list of the types of occupancy costs that can be included.
End-of-life does not necessarily mean that the building will serve no future purpose and will be demolished. Rather, the end of life should be regarded as the end of the study period of the analysis. This category relates to costs payable and credits accruing at the end of the analysis period.
Any costs associated with landfill, recycling, or disposal must be included.
The different stages in life cycle costing are:
Additional data such as physical performance and other data may be required, e.g., areas, physical condition, temperature levels. The collection and analysis of historic data are connected with the actual costs of occupying a building. Therefore, the need for this on a commercial basis must be justified. The collection and analysis of data cost money.
Most clients wish to obtain value for money. Life cycle cost management involves planning and controlling occupancy costs throughout the client’s occupancy to obtain the greatest value for the client. Collecting data about other buildings or the client’s construction does not benefit the client.
It involves using life cycle cost analysis to predict future costs. It also includes planning the timing of work and expenditure on a building. When alternative techniques or components are available, they should be evaluated, and choices shall be made so that the client obtains maximum benefit.
Planning should also take into account the effect of performance and qualitative alternatives, for example:
Like most planning forms, the plan produced should not be too rigid. They should be updated at intervals to consider changing circumstances and environmental changes. Short-term plans need to be in considerable detail, but longer-term plans (e.g., the fully functional life plan) will generally be drawn up.
The applications of life cycle costing are listed below:
Life cycle cost (LCC)is defined as the cost of an asset or its parts throughout its life cycle while fulfilling the needed performance. Whole life cost (WLC)is the total of all substantial and relevant initial and future costs and benefits of an asset throughout its life cycle while fulfilling the performance requirements.
Whole life costs include life cycle costs plus non-building costs such as site costs, financing costs, rental costs, etc., and incomes such as income from sales, loss of income, etc. as a result, whole life costs relate to the overall development, whereas life cycle costs relate only to the building.
The figure below illustrates the costs associated with each category. Life cycle costs include several items, which may be classified in various ways. 1. Construction cost 2. Maintenance cost 3. Operation cost 4. Occupancy cost 5. End of life cost