life cycle costing

The economic analysis of physical assets over the entire life cycle is essential in modern industry. Particularly, in investment decisions, not only the pure expenditure for the procurement is used. Life cycle costing considers the required investments of a production site’s life cycle as a whole. In order to reduce the life cycle costs it is necessary to identify, analyze and derive corresponding measures. In practice, the data tracking over several periods is challenging. The following paper shows how the new IT approach of cyber-physical systems can improve such data collection. Furthermore, it will be shown how this database supports future investment decisions as well as the selection of life cycle support services.

This article addresses the question whether a purely monetary-oriented user will decide to buy an entirely electrically powered vehicle today. For a vehicle that is available with petrol, diesel and electric drive, a life cycle cost analysis is performed. For this purpose, all cash inflows and outflows over the entire life cycle are covered, placed in a framework and finally the present value is determined to evaluate the alternatives. Making reasonable estimates special input parameters are varied in order to determine the resulting cost implications.

The operation of a capital good generates costs, which are mostly a multiple of the first investment. The value of this Life Cycle Costs is affected by the interplay between the product specific features and the customer specific operating conditions. This article aims to figure out chances and risks of Life Cycle Analysis.