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Article

George Norman

Defines life cycle costing, which gives rise to Life Cycle Cost(LCC). Defines LCC as “The total cost of the system or productunder study over its complete life cycle or…

Abstract

Defines life cycle costing, which gives rise to Life Cycle Cost (LCC). Defines LCC as “The total cost of the system or product under study over its complete life cycle or the duration of the period of study, whichever is the shorter”. Stresses that LCC can be used at whatever level is chosen (estate or, say, a boiler). Explains the timing and mechanism of measurement. Argues that the application of LCC at an early design stage will greatly enhance system design and operation. Offers other pertinent definitions.

Details

Property Management, vol. 8 no. 4
Type: Research Article
ISSN: 0263-7472

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Article

D.W. Hoar

The objective of this paper is to give a brief overview of the techniques for lifecycle costing and attempts to make a case for the need for chartered surveyors to become…

Abstract

The objective of this paper is to give a brief overview of the techniques for lifecycle costing and attempts to make a case for the need for chartered surveyors to become more proficient in the use of lifecycle costing techniques. It also considers the importance of the client's role in lifecycle costing; and discusses the assumptions that need to be made about the ‘life of the investment’. The paper also deals with the subject of discounting techniques and how they are influenced by inflation in prices, interest rates and risk. It includes discussion of the various costs and values which need to be considered in any life cycle costing study. In conclusion, there is a brief discussion of how lifecycle costing techniques support an investment appraisal of a number of options that may be open to a client.

Details

Property Management, vol. 6 no. 2
Type: Research Article
ISSN: 0263-7472

Abstract

Details

Servitization Strategy and Managerial Control
Type: Book
ISBN: 978-1-78714-845-1

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Book part

Petri Suomala

The essential investments in new product development (NPD) made by industrial companies entail effective management of NPD activities. In this context, performance…

Abstract

The essential investments in new product development (NPD) made by industrial companies entail effective management of NPD activities. In this context, performance measurement is one of the means that can be employed in the pursuit of effectiveness.

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Managing Product Innovation
Type: Book
ISBN: 978-1-84950-311-2

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Book part

Marc Wouters and Susana Morales

To provide an overview of research published in the management accounting literature on methods for cost management in new product development, such as a target costing

Abstract

Purpose

To provide an overview of research published in the management accounting literature on methods for cost management in new product development, such as a target costing, life cycle costing, component commonality, and modular design.

Methodology/approach

The structured literature search covered papers about 15 different cost management methods published in 40 journals in the period 1990–2013.

Findings

The search yielded a sample of 113 different papers. Many contained information about more than one method, and this yielded 149 references to specific methods. The number of references varied strongly per cost management method and per journal. Target costing has received by far the most attention in the publications in our sample; modular design, component commonality, and life cycle costing were ranked second and joint third. Most references were published in Management Science; Management Accounting Research; and Accounting, Organizations and Society. The results were strongly influenced by Management Science and Decision Science, because cost management methods with an engineering background were published above average in these two journals (design for manufacturing, component commonality, modular design, and product platforms) while other topics were published below average in these two journals.

Research Limitations/Implications

The scope of this review is accounting research. Future work could review the research on cost management methods in new product development published outside accounting.

Originality/value

The paper centers on methods for cost management, which complements reviews that focused on theoretical constructs of management accounting information and its use.

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Article

Anni Lindholm and Petri Suomala

The purpose of this paper is to discuss life cycle cost management and highlight the practical challenges related to collecting adequate data and practicing long‐term cost

Abstract

Purpose

The purpose of this paper is to discuss life cycle cost management and highlight the practical challenges related to collecting adequate data and practicing long‐term cost management in an uncertain environment.

Design/methodology/approach

The paper reports a case study conducted in the Finnish Defence Forces. As part of the case study, a life cycle cost model for a case product was developed.

Findings

Activity‐based life cycle cost modeling can provide relevant information for varying product management needs at different stages in the life of a product. Quantification of uncertainty is one of the elements in the modeling that can improve the feasibility of LCC both for cost estimation and tracking purposes.

Originality/value

Only a few empirical studies on life cycle costing have been reported which focus on the defence sector. The paper contributes to our understanding of how LCC can be used in a continuous manner and depicts how LCC can produce a sharpened cost image of a particular product.

Details

International Journal of Productivity and Performance Management, vol. 56 no. 8
Type: Research Article
ISSN: 1741-0401

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Article

John R. Selman and Rich Schneider

The US National Park Service (NPS) is responsible for the management of some of the most recognisable and notable natural and cultural resources in the USA. To make the…

Abstract

The US National Park Service (NPS) is responsible for the management of some of the most recognisable and notable natural and cultural resources in the USA. To make the case for additional maintenance funding, NPS is instituting lifecycle cost management practices. Over the 50‐year life cycle of the Redwood Information Center at Redwood National and State Parks in Crescent City, California, custodial costs alone will sum to more than the total replacement construction cost for the entire facility. This point illustrates an important aspect regarding the true cost of operating and sustaining physical infrastructure over its life cycle. It also suggests that understanding lifecycle costs is a critical element of effective, long‐term portfolio and asset management. Often, institutional owners of physical assets inadequately assess the true cost of building and owning facilities, typically overemphasising initial construction costs. Lifecycle operations and maintenance (O&M) and capital renewal costs, however, almost always comprise a far greater percentage of total lifecycle building costs. Using actual lifecycle costs for an asset that is owned and managed by NPS, this paper explores the development of full lifecycle costing, highlighting key lifecycle cost drivers, of an information centre at the Redwood National and State Parks.

Details

Journal of Facilities Management, vol. 3 no. 2
Type: Research Article
ISSN: 1472-5967

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Article

Yash Gupta and Wing Sing Chow

This article surveys the literature dealing with theory and applications of life cycle costing (LCC). It deals with the literature published in the last 25 years and…

Abstract

This article surveys the literature dealing with theory and applications of life cycle costing (LCC). It deals with the literature published in the last 25 years and provides 667 references.

Details

International Journal of Quality & Reliability Management, vol. 2 no. 3
Type: Research Article
ISSN: 0265-671X

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Article

Ali Tighnavard Balasbaneh, Abdul Kadir Bin Marsono and Emad Kasra Kermanshahi

The purpose of this study is to describe life cycle cost (LCC) and life cycle assessment (LCA) evaluation for single story building house in Malaysia. Two objective…

Abstract

Purpose

The purpose of this study is to describe life cycle cost (LCC) and life cycle assessment (LCA) evaluation for single story building house in Malaysia. Two objective functions, namely, LCA and LCC, were evaluated for each design and a total of 20 alternatives were analyzed. Two wall schemes that have been adopted from two different recent studies toward mitigation of climate change require clarification in both life cycle objectives.

Design/methodology/approach

For this strategic life cycle assessment, Simapro 8.3 tool has been chosen over a 50-year life span. LCC analysis was also used to determine not only the most energy-efficient strategy, but also the most economically feasible one. A present value (PV)-based economic analysis takes LCC into account.

Findings

The results will appear in present value and LC carbon footprint saving, both individually and in combination with each other. Result of life cycle management shows that timber wall−wooden post and beam covered by steel stud (W5) and wood truss with concrete roof tiles (R1) released less carbon emission to atmosphere and have lower life cycle cost over their life span. W5R1 releases 35 per cent less CO2 emission than the second best choice and costs 25 per cent less.

Originality/value

The indicator assessed was global warming, and as the focus was on GHG emissions, the focus of this study was mainly in the context of Malaysian construction, although the principles apply universally. The result would support the adoption of sustainable building for building sector.

Details

Construction Innovation, vol. 18 no. 3
Type: Research Article
ISSN: 1471-4175

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Article

Laxman Yadu Waghmode and Rajkumar Bhimgonda Patil

Reliability analysis is required to identify the components or subsystems with low reliability for a given designed performance. Life cycle cost analysis helps understand…

Abstract

Purpose

Reliability analysis is required to identify the components or subsystems with low reliability for a given designed performance. Life cycle cost analysis helps understand the cost implications over the entire life span of a product. The purpose of this paper is to present a case study describing reliability analysis and life cycle cost optimization of a band saw cutting machine manufactured and used in India.

Design/methodology/approach

The data required for reliability analysis is collected from the manufacturer and users of band saw cutting machine. The parameters of failure distribution have been estimated by using ReliaSoft’s Weibull++6 software. The life cycle cost is divided into various cost elements such as acquisition cost, operation cost, failure cost, support cost and net salvage value.

Findings

The results of the analysis show that the components such as band wheel bearing, guide roller bearing, limit switch, carbide pad, hydraulic cylinder oil seal, control panel dial, control panel and solenoid valve are critical from reliability and life cycle cost analysis perspective.

Originality/value

With certain design changes it is found that the reliability of the system is increased by 15.85 percent while the life cycle cost is reduced by 22.09 percent. The study also shows that the reliability analysis is useful for deciding maintenance intervals.

Details

International Journal of Quality & Reliability Management, vol. 33 no. 3
Type: Research Article
ISSN: 0265-671X

Keywords

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