Dynamic Life-Cycle-Costing (LCC)

Simulate dynamic life cycle costs (LCC) for capital goods

Arrange initial consultation

Why is it worth to analyze life cycle costs (LCC)?

The idea of life cycle costs (LCC) is to consider not only the direct costs associated with the purchase of a capital good, but also the costs of operation, maintenance and repair. Examples from everyday life show that decisions have long been made unconsciously on the basis of these considerations.

With the procurement of a new product or a new plant one can select usually between different offers and products. Here the LCC can be a large assistance, since with an analysis not only the purchase price, but also all later resulting costs are considered like e.g. the use costs or energy costs.

Therefore, the entire period of use of the capital goods is the actual decision criterion when considering which option is the most cost-effective for the investor. Since lower follow-up costs often lead to a higher purchase price in the long run to lower total costs.

«coscomp LCC» - Dynamic life cycle cost analysis for capital goods from procurement to disposal!

Data driven decision support during the entire life cycle

With the “coscomp LCC” analysis, you can not only obtain statistical data, but also carry out real, dynamic simulations over several years.

Definition

The coscomp LCC analysis takes into account the fact that a product generates costs not only at the moment of its procurement or during the depreciation period, but throughout its entire life cycle.

These are mainly dependent on the following parameters:

  • the duration of use (years, OTF = On Time Fraction)
  • Locations and number of units (worldwide)
  • MTBF – Mean time between failure
  • MTTR – Mean time to repair
  • Distribution of units (operational profile of the years)
  • Definition of FIX costs and spare parts supply strategy
  • Mission profile and environmental influences

 

 

Methodology

Software-based modular and allocation method with reference WBS, which enables fast and valid cost forecasts.

  • Calculation of LCC based on MTBF values (Mean Time Between Failure)
  • No purely static consideration of the probabilities of default
  • Dynamic, complete simulation of LCC behavior
  • Determining the BASIC MTBF from the existing parameters:
    • INDEX E/M (technology/ complexity)
    • ENVIRP (Quality/ Operational Environment)
    • WE/M (weight)
    • NPARTS (system relevant components)
  • Determination of the MTBF for electronic (MTBFE) and mechanical (MTBFM) components
  • For software a MTBED (Mean Time Between Error Detection) is determined
  • Determination of the MISSIONS-MTBF by influencing the BASIC-MTBF by application, handling, operational and environmental influences.

Goals

Direct determination of all related costs of a capital good, from procurement to disposal.

The aim of the coscomp LCC simulation is to determine all costs of a product, from purchase to disposal. 

The costs are divided into the following areas:

  • Life acquisition cost: Acquisition costs of the product
  • Life Operating Cost: Costs from direct use (e.g. energy costs)
  • Life Support Cost: Costs for repairs, maintenance, spare parts and transport
  • Life Termination Cost: Disposal costs

Results

Valid and transparent representation of the “sweet spot” (lowest total cost) between investment costs and maintenance costs. As well as traceability and comparable LCC cost considerations.

coscomp LCC provides different forms of expenditure for the determined results. This allows the user to perform various analyses and comparisons.

Results from the simulation are for example besides the pure cost considerations also:

  • Number of errors per component
  • Number of parts to be repaired per component
  • Number of disposed parts per component
  • Stock lists for initial supply
  • Sequence Supply (refilling of the bearing)

 

coscomp LCC enables the implementation and comparison of several concepts to answer complex questions such as

  • What is the effect of more intensive maintenance in terms of repair wage costs?
  • What effects does a higher repair success have?
  • How does the initial and follow-up supply of spare parts influence transport costs?