Towards a standardised approach to life cycle cost analysis
by Klaus Geissdoerfer; Ronald Gleich; Andreas Wald; Jaideep Motwani
International Journal of Procurement Management (IJPM), Vol. 5, No. 3, 2012

Abstract: The rising significance of indirect costs attracts a greater prominence to total cost considerations in purchasing decisions for capital goods. Purchasing decisions made on the basis of a life cycle cost analysis include both, direct costs and indirect costs accruing over the entire lifespan. Existing models for life cycle cost analysis differ significantly from each other as they have been developed mainly for specific applications. A wider use of these techniques depends on the availability of standardised models which can easily be adapted to specific industries. We derive the requirements for the standardisation of life cycle cost analysis models from the existing literature. On this basis, we develop a standardised model with a modular structure. Due to its flexible structure, the model can be adopted to the needs of different industries.

Online publication date: Sat, 16-Aug-2014

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