Life cycle costing for facilities pdf

Life cycle costing is a system that tracks and accumulates the actual costs and revenues attributable to cost object from its invention to its abandonment. A framework for facilities lifecycle cost management. Guidance related to lifecycle costing and value engineering was recognized as being supportive of sustainable development, in particular when used in the conceptual planning and design phases of acquisition, where decisions are made that substantially effect the ultimate performance of a building over its life cycle. Discover the key things you use life cycle costing for. It helps to identity most economical, cost effective and beneficial alternatives among the available range of options in order to asset ownership, maintain, run and develop various projects and business segments. What you need in order to conduct life cycle cost analysis. Life cycle costing of passenger cars general information quantity unit 90 4 number of years of usage years 5 4 discount rate % 4 4 product, fill in the intended product hybride car petrol car investments initial investment per unit eurunit 22 000 18 000 costs of acquisition per unit 22 000 18 000 costs for fuel.

Guidance related to life cycle costing and value engineering was recognized as being supportive of sustainable development, in particular when used in the conceptual planning and design phases of acquisition, where decisions are made that substantially effect the ultimate performance of a building over its life cycle. Life cycle costing llc is a methodology to evaluate of the all costs over the lifecycle of works, supplies or services. Life cycle costing colorado department of transportation 1 1. Life cycle costing lcc is defined in the international organization for standardization standard, buildings and constructed assets, servicelife planning, part 5. Nist handbook 5 lifecycle costing manual for the federal.

Issue 2 making a decision on the basis of lcc may make it more expensive upfront. Initial costs operating costs disposal costs life cycle costing 4. To improve the costeffectiveness of its building and renovation programs, stanford must invest in designs and systems with improved longterm performance. In capital budgeting, the total cost of ownership is compiled and then reduced to its present value in order to determi. Gain insight into the analysis necessary for decision making. Life cycle costing is a method of economic analysis for all costs related to building, operating, and maintaining an energy conservation measure ecm project over a defined period of time. Life cycle assessment lca is the most defined and developed life cycle approach. There are also sixteen case studies that show how to apply lcc to particular facility types and building components, including. Despite existing life cycle costing models, descriptions and practicable suggestions for conducting life cycle cost analyses, no systematic anatomy on actual implementations of life cycle costing methods exist in indian context including defence procurements. Life cycle costing can be applied to every aspect of construction from all types of buildings commercial, educational, industrial, health care and more, to roads and bridges, to hvac equipment and electrical systems upgrades and materials and equipment procurement. It takes into account all costs of acquiring, owning, and disposing of a building or building system. What you need in order to conduct lifecycle cost analysis. Why decisions on life cycle costing lcc are needed. Essential guidance for optimizing the cost of facilities ownership.

Unfortunately, facilities managers may confuse life cycle costing in facilities management with total cost of ownership. Energy price indices and discount factors for lifecycle. The sum of initial and future costs associated with the construction and operation of a building over a period of time is called the life cycle cost of a facility. Fundamentals of asset management 5 concepts of cost particularly useful to am current replacement cost the full cost to replace an asset in its current operating environment life cycle cost the total cost of an item throughout its life, including the costs of planning, design, acquisition, operations, maintenance, and. Strategic projectsthe 28 high priority projects that have been committed for. A framework for facilities lifecycle cost management core working group asset lifecycle model. The national institute of standards and technology nist developed the building life cycle cost blcc programs to provide computational support for the analysis of capital investments in buildings. Flooring materials lifecycle costing for educational. To conduct lifecycle cost analysis, the following information is the minimum. Obtaining lifecycle costeffective facilities in the. By focusing on reducing the lifecycle costs of its facilities, dod can minimize its total cost of facility ownership. Life cycle costing is the process of compiling all costs that the owner or producer of an asset will incur over its lifespan.

Many building owners apply the principles of life cycle cost analysis in decisions they. Life cycle costing page 5 of 15 products in the case of the procurement of a product the only market cost that may be relevant is the purchase price. The final result of life cycle costing is, therefore, determined by the availability and reliability of the input data 12. What is life cycle costing in facilities management. This paper looks at what facility management and life cycle are, at the phases of the life cycle costing according to facility management, life cycle costs of buildings, the impact of facility. Pdf sensitivity analysis of facilities life cycle costs. To conduct life cycle cost analysis, the following information is the minimum.

Issue 3 a general appreciation for lcc is critical to change the procurement mindset from the best value for moneyto the best value across the asset life cycle. Lifecycle costingiso 156865 as an economic assessment considering all agreed projected significant and relevant cost flows over a period. Guidelines for life cycle cost analysis sustainable stanford. Find out how to use an excel spreadsheet to do life cycle costing calculations. Life cycle costing provides a significantly better assessment of the longterm costeffectiveness of a project than alternative financial methods that focus only on first costs or on operatingrelated costs in the short run. Life cycle costing for facilities download ebook pdf.

Assumed escalation rates are used to account for increases in utility costs over time. The electronic life cycle costing spreadsheet program included with the book simplifies the process of applying lcc to users own projects. Life cycle cost analysis can be performed on large and small buildings or on isolated building systems. Through lcc one seeks to minimize the cost of obtaining a cer tain level of output. They include blcc, the energy escalation rate calculator, handbook 5, and. Pdf during the last decades, the technological development, including the production of materials, buildings and services, brought about good changes. Understand how to gather and establish the life cycle costs. Click download or read online button to get life cycle cost and economic analysis book now. As a consequence, the selection of materials for new educational facilities is usually based on. The harvard life cycle costing policy and calculator was designed to aid harvard decision makers in considering all present and future costs related to new construction, renovation, equipment replacement, or any other project that involves upfront and ongoing expenditures. Lifecycle costing llc is a methodology to evaluate of the all costs over the lifecycle of works, supplies or services. A guide to integrating value engineering, lifecycle costing, and sustainable development 2001 chapter. It is an extensive method designed for accounting all relevant environmental impacts of products and services. For example the life cycle of a roof can be typically 20 years.

Detailed guidance on the use of life cycle costing in procurement is available from the office of. Life cycle costing for facilities pdf download 16fnvl. This site is like a library, use search box in the widget to get ebook that you want. Lifecycle cost analysis for buildings is easier than you. Building life cycle cost programs department of energy. The cost of operating, maintaining, and using the item is added to the purchase price. Flooring materials lifecycle costing for educational facilities helena moussatche and jennifer languell introduction the conscientious selections of materials by designers or facility managers are often constrained by strict budget requirements. Life cycle costing is a key asset management tool that takes into account the whole of life implications of planning, acquiring, operating, maintaining and disposing.

The guide lines for life cycle cost analysis lcca instruct project. In addition, we would like to thank those individuals at each agency that provided us substantial support for this report. Life cycle costing as an important contribution to. The costs are included in different stages of the product. Life cycle cost guidelines for materials and building systems.

Life cycle costing is a data intensive procedure by reason of the complexity of the building projects and the many components of a building. Facility managers can apply lifecycle cost analysis to all sorts of decisions and project sizes, when the main focus is simply to determine the lowest cost alternative for a given level of performance. However, over the life of the project, facility management cost is often two to three times higher than acquisition costs. L ife cycle cost analysis is a method of determining the entire cost of a structure, product, or component over its expected useful life. The framework provides a structure to help property owners. Life cycle cost guidelines for materials and building systems for floridas public educational facilities.

Executive summary the research project was initiated by the colorado department of transportation cdot to develop guidelines for determining the longterm costs of adding additional capacity and other related transportation improvements to the state highway and bridge system. Life cycle cost analysis lcca is a method for assessing the total cost of facility ownership. This lifecycle cost estimation methods lcc project has been carried out in. Life cycle costing for facilities download ebook pdf, epub. Life cycle cost analysis of the constructed facilities provides insight into the planning, design, construction, operation, maintenance and disposal costs of the facilities. Owners and facility designers are frustrated with traditional costcutting approaches that yield the cheapest product, but end up sacrificing quality. Life cycle costing involves tracing cost and revenues on a product by product base over several calendar periods.

Click download or read online button to get life cycle costing for facilities book now. Life cycle cost and economic analysis download ebook pdf. Lifecycle costs are all the costs associated with the product for its entire life cycle. Life cycle costing lcc, by definition, refers to an analysis technique which encom passes all costs associated with a product from its inception to its disposal. Life cycle costing european commission european union. If, however, there is a potential for energy or water to be consumed by that product. Issue 1 life cycle costing is not yet considered to be a critical component of spp.

Life cycle cost analysis is a structured method of determining the entire cost of a structure, product, or component over its expected useful life by adding the cost of operating, maintaining, and using it to the purchase price. Apr 16, 2018 unfortunately, facilities managers may confuse life cycle costing in facilities management with total cost of ownership. It takes into account all the costs of acquiring, owning, and disposing of a building or other asset. Lifecycle cost analysis for buildings is easier than you thought. For the facilitation of management process, life cycle cost analysis is one amazing method. Nist handbook 5 1995 edition life cycle costing manual for the federal energy management program sieglinde k. Life cycle costing is an economic management tool designed to evaluate economic consequences of an item, system or facility over its lifespan, expressed in terms of equivalent cost, using baselines identical to those used for initial cost. Still today, when deciding about the acquisitions of a new asset, it is widespread to concentrate only or. Lifecycle cost analysis is a structured method of determining the entire cost of a structure, product, or component over its expected useful life by adding the cost of. As the campus grows and ages, the cumulative cost of operating and maintaining facilities significantly impacts the overall institutional budget. Life cycle costing colorado department of transportation 3 3. Life cycle costs analysis is integrated into the fci analysis in this report to provide a yearly outlook for both. The general concept of a life cycle cost is not new.

Defined as the floor area of a facility, which is necessary for the operation of the facility and is not available for general occupancy. Accordingly, dod incorporates lifecycle costeffective practices into many aspects of the military planning and construction processes, but challenges and opportunities in the process remain. For each case study we interviewed the leaders in life cycle cost analysis at each agency. The interviews with finnish facility management staff and building designers. Nist handbook 5 lifecycle costing manual for the federal energy management program. Product life cycle costing traces costs and revenues of each product over several calendar periods throughout their entire life cycle. Uses a life cycle costing case study to describe a technique useful to facilities managers in a decision about the acquisition of plant and equipment. Mobilityprograms services and projects that provide for the movement of people, goods and information. In the absence of actual data, estimates can be based on past experiences.

Facility managers can apply life cycle cost analysis to all sorts of decisions and project sizes, when the main focus is simply to determine the lowest cost alternative for a given level of performance. It compares initial investment options and identifies the least cost alternatives for a twenty year period. Pdf life cycle cost lcc is an important technique for evaluating the total cost of ownership between mutually exclusive alternatives. Its task was to put forward a framework and a glossary of terms commonly used to communicate about facilities related issues, from space. Life cycle cost guidelines for materials and building. Facilities management from a to z fm guru training.

Education facilities officersappa, the federal facilities council, the international facility management association, holder construction company and infrastructure strategies. Governments and contracting authorities are becoming more aware of the fact that the far lifecycle costs represent a better indicator of value for money than the initial ce prialone. Life cycle cost analysis lcca is an economic evaluation technique that determines the total cost of owning and operating a facility over period of time. Life cycle costing for facilities rsmeans reference books. Use of life cycle assessment lca in global companies. Purpose life cycle costing lcc is an important economic analysis used in the selection of alternatives that impact both pending and future costs. Life cycle cost analysis handbook alaska department of education.

Life cycle costing, properly done, enables them to achieve both high quality and costs that meet their budgets. Understanding how a products sales are going to change over time as demand for it changes and how profits need to be made to cover the cost of developing and making the product and eventually retiring it and the facilities associated with it. Decisions in all stages of the facilitys life acquisition, operation, maintenance, replacement. Governments and contracting authorities are becoming more aware of the fact that the far life cycle costs represent a better indicator of value for money than the initial ce prialone.