ABSTRACT
This chapter describes the methods used to evaluate the entire life cycle of the product or system being developed, from its concept development to its disposal (after retirement)—often called the “cradle-to-grave” considerations or life cycle analyses (LCA). Typically, the present value of costs incurred during the entire product program from the product concept generation to the retirement of the product and its production plant is added, and the sum is subtracted from the present value of the total revenues generated by the product sales (number of units sold during the life cycle times the selling price). The resulting profit (revenues minus the costs) is used to evaluate the product program. This life cycle analysis involving costs and revenue is called the life cycle costing analysis (LCCA). The life cycle costing analysis (LCCA) is most used in industries. However, due to the increasing importance of sustainability, LCA is also used to determine the effects due to environmental pollution (e.g., carbon), climate change, and emphasis on improving efficiencies in consumption of resources such as water and energy produced using renewable energy vs. the fossil fuel power plants.
