LCCA Life-Cycle Cost Analysis Group 3A. Introduction “Life-cycle cost analysis (LCCA) is a method for estimating the total cost of ownership of a building,

LCCALife-Cycle Cost Analysis

Group 3A

Introduction

“Life-cycle cost analysis (LCCA) is a method for estimating the total cost of ownership of a building, taking into account the cost of acquisition, ownership, operating, and disposing of a building or building system.”

Introduction

• Enables to make a comparison between alternative solutions

• Can be performed on all sizes of buildings or isolated building systems

• Problems• Uncertainty of input values

• Different budgets for building and operating costs

Methods

• ESTIMATING ALTERNATIVE BUILDING DESIGNS

• RELIABLE LONG TERM ASSESSMENTS

• WIDE SCOPE

Methods

MAIN VARIABLES:

• COST

• TIME

• DISCOUNT RATE

Methods

• All of the costs of the entire ownership• Cost

• construction 2%

• Maintenance 6%

• functioning 92%

• Recommended to be done in many stages of the projects• Costs of different design solutions

CostsSeveral costs

• Initial costs

• Fuel costs

• Operating, maintenance and repair costs

• Replacement costs

• Residual values

• Other costs

Time

• Vital to choose suitable calculating period

• Not too long

• Choose to match with the economic life of the building

• Residential building 30-40 years

• Commercial buildings around 20 years

Discount rate

• To make cash flows time-equivalent

• Future cash flows present value

• Smaller the higher the rate of intrest is and the farther into the future payment goes

dis = 1/(1+r/100)î where,r = rate of interesti = time period

Life-Cycle Cost Calculation

LCC = Ipv + Repl — Res + Epv + Wpv + OMRpv + Opv,

Supplementary measures

PURPOSE TO FIND OUT:

• COST-EFFECTIVENESS

• RANKING PROJECTS

• SCREENING PROJECTS

Uncertainty evaluations

• ESTIMATING THE OUTCOME OF CHOOSING WRONG PROJECT ALTERNATIVE

• DETERMINISTIC AND PROBABILISTIC TECHNIQUES

• DETERMINISTIC TECHNIQUES ARE EASIER TO PERFORM

• Sensitivity analysis

• Break-even analysis

LCCA in real life

• Case study from the USA• College Station (warmer) and Minneapolis (cooler)

• Insulation material fiberglass or polystyrene

• Three information• 1. Payback time

LCCA in real life- 2. Total life-cycle cost of insulation material (polystyrene left or fiberglass right)

- 3. Size of the insulation

LCCA in other countries• LCCA has been standardized in Europe in 2008

• The number of the standard is ”15686-5 Buildings and constructed assets — Service-life planning — Part 5: Life-cycle costing”

Thank you!