How to perform an LCC

The aim of this strategy is to give practical advice on how to conduct an LCC study. The strategy is based on experiences from ABB.

LCC is a method to analyze the total cost of acquisition, operation, maintenance, and support of a product/system/service throughout its useful life, and including the cost of disposal. This LCC analysis can provide important inputs in the decision making process, for example;

• evaluation and comparison of alternative design approaches; 
• assessment of economic viability of projects/products; 
• identification of cost drivers and cost effective improvements;  
• evaluation and comparison of alternative strategies for product use, operation, test, inspection, maintenance, etc.; 
• evaluation and comparison of different approaches for replacement, rehabilitation/life extension or retirement of ageing facilities; 
• allocation of available funds among the competing priorities for product development/improvement; 
• assessment of product assurance criteria through verification tests and its trade-off

R&D and marketing & sales personnel are the main target groups for this strategy. R&D personnel, marketing & sales department as well as customers benefit from the result of using LCC.

Working procedure