Life Cycle Costing Training

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About Course

This comprehensive Life Cycle Costing (LCC) training course takes participants from the basics of LCC to advanced applications in real-world scenarios. It equips asset managers, project sponsors, and engineering teams with the skills to evaluate the total expenditure of assets and projects over their entire lifecycle, from initial investment to long-term operational costs. Participants will learn to make informed decisions that balance capital and operating costs, ensuring the most economical solutions are selected for sustainable asset management and project delivery. The course covers essential concepts, cost analysis techniques, and practical tools, including sensitivity analysis and Monte Carlo simulations, all within a strategic framework to maximize asset reliability and cost-effectiveness.
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What I will learn?

  • Fundamentals of Life Cycle Costing (LCC)
  • Cost Models and Analysis
  • Investment Analysis
  • LCC as an Engineering and Management Tool
  • Structure and Application of LCC
  • Sensitivity and Trade-off Analysis
  • Monte Carlo Simulations
  • Practical LCC Implementation
  • Decision-Making with LCC

Course Curriculum

Module 1: Introduction to LCC
Cost models and analysis Cost elements Investment analysis LCC as an engineering tool LCC as a management toolCost models and analysis Cost elements Investment analysis LCC as an engineering tool LCC as a management tool

Module 2: LCC Structure
The language of money—business facts of life for engineers Important financial concepts—net present values Alternatives—The accounting view and engineering view Checklists for acquisition and sustaining costs Effectiveness issues—ARM*C Defining the LCC problem—the recipe and steps Choosing analytical cost models Preparing cost profiles by year—why this is important How equipment lives and dies

Module 3: LCC Analysis
Pareto charts—separating the vital few cost contributors Sensitivity analysis— “what if” scenarios Tradeoff conditions—how to show and how to sell Adding uncertainty to LCC—Monte Carlo models The value of LCC—buyer and seller viewpoints How much can I afford to pay—quick estimates Databases for failure information LCC decisions for maintenance projects

Module 4: LCC Cycle – Practical Implication
Sustaining cost templates Effectiveness equation trade-off tools for LCC LCC facts are driven by data Alternatives with acquisition/supporting costs Choosing the analytical cost model Cost profiles for each year of study Pareto charts of vital few cost contributors Risk studies of high-cost items and occurrences Adding uncertainty to the LCC results How both end-user and suppliers use LCC Economic business facts of life for engineers Discounted cash flow and net present value Acquisition cost templates SAE LCC cost template Trade-off format benchmark diagrams Defining the LCC problem Preparing the cost breakdown tree Gathering cost estimates and cost models Break-even charts for alternatives Sensitivity analysis of high-cost items Selecting a preferred course of action using LCC References from the literature Performing NPV Monte Carlo simulations Using NPV and the effectiveness trade-offs Solving a variety of problems to make life-cycle cost decisions with Excel and cost scenarios provided by the instructor

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Requirements

  • 1. paper/notebook
  • 2. appropriate outfit1. paper/notebook
  • 2. appropriate outfit

Target Audience

  • Asset Managers
  • Project Managers
  • Engineering Managers
  • Finance Professionals
  • Procurement Officers
  • Maintenance Managers
  • Operations Managers
  • Government and Public Sector Officials

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