Life-cycle costing
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Life-cycle costing is a decision-making technique which takes into account both initial and future costs. For buildings and structures this usually means considering not just capital costs but relevant costs in use (operational costs) such as maintenance, component replacement, utilities, managing the asset for a given period, and end-of-life costs.
Many designers and clients apply life-cycle costing intuitively when making choices, along the lines of: Solid timber flooring strips may have a higher capital cost than a laminate floor alternative. But taking into account increased risk of damage and earlier replacement of a laminate floor, paying more now for a solid timber floor may result in less cost and disruption in the long term.
Life-cycle costing methods formalise and attempt to quantify this approach. Life-cycle costing can also be used as part of a value Design > Engineer;ing approach, indeed, for short life applications, less costly and less durable component options may offer better value.
Many designers and clients apply life-cycle costing intuitively when making choices, along the lines of: Solid timber flooring strips may have a higher capital cost than a laminate floor alternative. But taking into account increased risk of damage and earlier replacement of a laminate floor, paying more now for a solid timber floor may result in less cost and disruption in the long term.
Life-cycle costing methods formalise and attempt to quantify this approach. Life-cycle costing can also be used as part of a value Design > Engineer;ing approach, indeed, for short life applications, less costly and less durable component options may offer better value.
Contents:
Life-cycle costing and whole-life costing
Calculating life-cycle costs
Life-cycle cost models
Life-cycle cost outcomes: timber components
Life-cycle costs for complete buildings
Life-cycle costin (LCC), considers capital costs, costs in use and end-of-life costs.
The main drivers for life-cycle costing or whole-life costing in the UK stem from Government – to demonstrate value for money and promote sustainability.
The life-cycle cost is the sum of capital costs and discounted future costs or incomes for a given period. This is calculated using a formula.
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