ABSTRACT
Life Cycle Cost Analysis is an applied economic tool. It is important to understand the methodologies of Life Cycle Cost Analysis with real-time examples. This chapter explains the concept of Life Cycle Cost Analysis with an example of a project to install sheet metal cutting machines at a steel fabrication shop. Two available options are explored for the sheet metal cutting machines before making the investment decision. The two options are new sophisticated computer numerical control (CNC) machines or a semi-automated machine. Life Cycle Cost Analysis methodology is adopted to compare the two options. This chapter gives a detailed step-by-step guideline about the Life Cycle Cost Analysis methods. The method is explained for both options with a simple tabular format using the formulas so that the process can be easily conceived and applied for future usage.
