Life Cycle Costing

Effective asset management is achieved by understanding the life cycle of your assets. It is a critical step in providing ongoing organisational efficiency through continuous improvement by aligning management with the corporate or business strategic plan.

The life cycle naturally flows from asset registers and capital expenditure forecasting.

• Macro analysis of costs incorporating known historical expenditure and forecasted costs to assist in determining the level of renewal requirements, effective life, level of functionality, performance and obsolescence
• The recording of management practices of a building, facility or infrastructure assets in relation to its capital expenditure, operational and maintenance costs over the ownership life and to identify areas of improvement

Life cycle analysis can also involve:

• Micro analysis of cost analysis comparisons of building elements, materials, plant or equipment, and their anticipated performance and associated costs over time are important at design stage i.e. reviewing sustainable design options
• The development of business case models using discounted cash flows to calculate the internal rate of return