Life Cycle Cost
Life Cycle Cost is the total cost of acquiring, operating, maintaining, improving, and disposing of an asset over its useful life.
What this term means in maintenance
Life Cycle Cost is the total cost of acquiring, operating, maintaining, improving, and disposing of an asset over its useful life.
Cost elements
Life Cycle Cost may include:
- Purchase
- Installation
- Commissioning
- Energy
- Labor
- Maintenance
- Spare parts
- Downtime
- Compliance
- Modification
- Disposal
Practical example
A lower-cost pump consumes more energy and requires frequent seals. A higher purchase-price pump may have a lower life cycle cost.
How LCC is used
It supports asset selection, replacement, overhaul, design, maintenance strategy, and capital justification.
Time value
Long-term evaluations may discount future costs to a present value.
Common mistake
Selecting equipment only on purchase price ignores the much larger cost of operation, maintenance, downtime, and energy.
Related concepts
Related maintenance terms
Keep exploring connected CMMS, reliability, and maintenance planning terms.
Asset Lifecycle Management
Asset lifecycle management is the coordinated management of an asset from need and acquisition through operation, maintenance, improvement, renewal, and disposal.
Remaining Useful Life
Remaining Useful Life is an estimate of how long an asset or component can continue performing acceptably before repair, replacement, or failure.
Asset Criticality
Asset criticality is a structured assessment of how strongly an asset failure could affect safety, environment, quality, production, compliance, cost, and recovery.
Life Cycle Cost FAQs
- What does LCC include?
Purchase, installation, energy, operation, maintenance, downtime, improvement, and disposal.
- Why is LCC useful?
It compares long-term options beyond purchase price.
- Can downtime be included?
Yes, when the calculation method and assumptions are clearly defined.