Life-Cycle Costing (Lcc) Definition
Life Cycle Costing (LCC) is a tool that can be used to assess the total cost of ownership for a product or system over its entire life cycle. This includes all costs associated with acquiring, operating, and disposing of the asset. LCC analysis can be used to compare different options for procurement, identify potential cost savings opportunities, and make more informed decisions about which products or systems to procure.
There are several factors that must be considered when conducting an LCC analysis. These include:
-The expected lifetime of the asset
-The anticipated usage pattern
-The frequency and severity of maintenance requirements
-The expected scrap value or replacement cost at the end of the asset’s life cycle
-The estimated costs of disposal or recycling
Conducting a thorough LCC analysis can be time-consuming and complex. However, it is a valuable tool that can help organizations save money and make better procurement decisions.