All projects have basically four phases namely Inception, Development, Implementation and Disposal in their Life Cycle. In all the above phases there will be a cost involvement.
A project Life Cycle is a phase-oriented view of the project (Levinne, 2002).
The present value of the total cost of that asset over its operating life including initial capital costs, operating costs and the cost or benefit of the eventual disposal of the asset at the end of its life. (Norman & Hoor, 1992)
Hence Life Cycle Cost (LCC) can be defined as “the total discounted cost of designing, developing, operating, maintaining, and disposing of a building or a building system” over a period of time.
Component of LCC
- Life cycle cost planning (LCCP)
- Life cycle cost analysis (LCCA)
- Life cycle cost management (LCCM)
Life Cycle Cost Planning (LCCP) is usually using for a forecasting of total cost, evaluating the alternatives etc. and includes planning of timing of works, expenditure on the building.
Life Cycle Cost Analysis (LCCA) is an economic evaluation technique that determines the total cost of owning and operating a facility over period of time.
Life Cycle Cost Management (LCCM) is formulating an appropriate maintenance policy including controlling occupancy costs.
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