ABSTRACT
Chapter 10 introduced the concept of LCC; this chapter addresses the issue of LCC in a more specific manner, from a total cost of ownership perspective. The total cost of ownership is identified as the LCC of the equipment. These costs are divided into two cost factors:
Nonrecurring costs ◾ Support costs ◾
The purpose of LCC analysis is to explore various alternatives to identify the most cost-effective production machinery or equipment for a specific application. Applying the LCC concept simply means identifying and adding up costs associated with the system’s life cycle (i.e., the total operational life). As already mentioned, the application is based on the five phases covered in Chapters 11-14:
Phase 1 Concept ◾ Phase 2 Development and Design ◾ Phase 3 Build and Install ◾ Phase 4 Operation and Support ◾ Phase 5 Conversion and/or Decommission ◾
For example, if a luxury taxi service has a new specification that is only met by two cars, car A or car B, a purchase decision must be made. However, it should not be made based on performance alone, or even purchase price, but on the LCC.
