Life Cycle Cost Analysis for urban transport systems
Description
History
Life Cycle Cost Analysis became popular in the 1960’s when the US government agencies started using it as an instrument to improve cost effectiveness of building and equipment procurement.
From that point the use has spread in the business sector for all kind of project evaluation and management accounting.
In recent years the use is applied more and more in the Public Transport sector due to the appearance of Built-Operate-Transfer (BOT) ,or similar, contracts.
The private entrepreneur and the financing organizations need to calculate in detail investment and operation/maintenance costs and the relationship between both.
In this activity input can be expected from the traditional (government owned) transport system operators (clients) who have gained expertise by operating the system during long periods of time.
General
The purpose of the Life Cycle Cost Analysis (LCCA ) method is to calculate the overall costs of project alternatives and to select the design that ensures the system will provide the lowest overall cost of ownership/operation consistent with its quality and function.
The LCCA has to be performed early in the design process while there is still a chance to refine the design to ensure a reduction in Life Cycle Cost (LCC ).
The first and most challenging task of a LCCA is to determine the economic effects of systems or the alternatives and to quantify these effects in terms of money.
The LCCA calculates the costs of a system or a product over its entire lifespan including:
CMS Website