Life Cycle Cost Analysis

A manufacturing company’s level of competitiveness in the global market depends on its capacity to bring products to market at the right time, guaranteeing their functionality and quality, and limiting the cost. Independent of product typology, controlling only the costs of resource acquisition, production, and distribution can be considered an incomplete and obsolete approach in today’s world. Only by including the costs of the entire life cycle among the parameters of the decision-making process is it possible to achieve a design that is effective in terms of economic feasibility. Life Cycle Cost Analysis, or Life Cycle Costing, is a methodology directed at the evaluation of all the costs associated with an activity or a product over its entire life cycle, thus assuming the dual role of a Life Cycle Assessment in economic terms. By virtue of their shared life cycle approach, Life Cycle Cost Analysis is the most appropriate economic analysis instrument in a Life Cycle Design intervention.