Life Cycle Cost Principle


 Life Cycle Cost Principle


A through economic analysis should account for the entire life cycle of material handling equipment and resulting systems.


  1. Life cycle cost includes all cash flows that occur between the time the first dollar is spent to plan a new material handling method or piece of equipment until that method and /or equipment is totally replaced.
  2. Life cycle cost includes capital investment, installation, set up and equipment programming, training system testing and acceptance, operating (labor, utilities etc.), maintenance and repair, reuse value and ultimate disposal.
  3. A plan for preventive and predictive maintenance should be prepared for the equipment, and the estimated cost of maintenance and spare parts should be included in the economic analysis.

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