Life-Cycle Cost and Economic Analysis – 1991

In these times of intensifying international economic competition, producers are searching for ways to gain a sustainable market advantage for their products, systems, and structures. Acquisitions, mergers, and advertising campaigns seem unable to create the intrinsic wealth so essential for long-term corporate health. Economic competitiveness is essential for the viability of private and public sector organizations worldwide

The purpose of technical activities of design and analysis is to determine how physical factors may be altered to create the most benefit for the least cost, in terms of product cost, product support cost, and social cost. An overarching goal is to bring high-quality products, systems, and structures into being in response to established needs. Engineering with an emphasis on economic competitiveness must become co-equal with concerns for advertising, finance, production, and distribution. It is through a concurrent life-cycle approach that economic competitiveness can be enhanced

Our title, Life-Cycle Cost and Economic Analysis, might incorrectly imply that the benefit side has been ignored in this book. Effectiveness, worth, profit, and other tangible and intangible benefit measures are essential and central to the subject. When these measures are economic in nature, the methodology is straightforward. We treat these straightforward cases, as well as the more difficult situations embracing non-economic benefits factors

This book is organized around the concurrent life-cycle concept fully recognizing that superior product attributes are quality "effects" resulting from design "causes." These attributes have their genesis in the early conceptual stage, where a large percentage of the life-cycle cost is committed. Accordingly, life-cycle cost and life-cycle economic analysis are merged in this text. Our objective is to provide a complete treatment of the subject, originating with the identification of a need and ending with phaseout and disposal

This text progresses from conceptual and theoretical material, to methodology, and then to applications. It includes two comprehensive case studies. Part I presents life-cycle economic concepts and provides the theoretical under pinning needed to formulate and analyze economic decisions. Part II sets forth life-cycle costing methodology, presents cost estimation and the treatment thereof, addresses the economic evaluation and optimization of alternatives, and introduces the managerial aspects of life-cycle costing. Part III provides two chapter-length case studies bringing together many of the ideas and approaches presented earlier in the text. Finally, Part IV provides supporting material in five appendices

A full range of concepts, theory, methodology, and applications makes this book usable in the classroom as well as by the practicing professional. We have opted for generality in the types of products and systems to which this subject may be applied. Economic factors permeate all aspects of the techno logical process of bringing products and systems into being. Accordingly, those who are striving to enhance the economic stature of their organization will find this book to be well suited to their endeavor. Numerous examples and problems are presented to help the reader gain an in-depth understanding of the process of life-cycle economic analysis

Many students have helped us in the development and refinement of this material. Gregory Barrett, Bill Hoehn, Merlin Lee, Brian Platnick, and Shashi Rao made specific contributions. Special credit is due Dinesh Verma for his direct help with several sections and for his overall contribution to the manuscript. Finally, Joni Chambers and Nicole Lively put it all together with their excellent word processing skills.


Wolter J. Fabrycky
Benjamin S. Blanchard

Resources:     Life-Cycle Cost and Economic Analysis – 1991