INTRODUCTION TO LIFE CYCLE COSTING

This introductory paper aims to make Life Cycle Costing (LCC) understandable and usable by average engineers. Procurement decisions for capital equipment must be based on the total life cycle cost rather than the usual practice of procurement based on the initial purchase price. In recent years, LCC has become a part of strategic cost management, and the concept can be applied to the effective procurement of engineering assets. LCC provides insights into the total cost of acquisition and ownership and thus effectively supports decision-making in the evaluation of various alternatives. The primary objective of this paper is to assist engineers in understanding the methods used in the development of models for estimating the life cycle cost of capital assets