Life Cycle Costing (on German: Costs within a life cycle) is a cost management method, which regards the development of a product from the product idea to the cancelling of the market (product life cycle), thus from the "cradle in the grave". Are only the negative payment stream (expenditures) of interest, which become proceeds (incomes) neglected.

Perspectives

Life Cycle Costing can be regarded from two different perspectives, from the view of the producer or the customer.

From producer view both the entire own costs, and the costs, which result at the customer, are determined. Already before production, thus in the product development the producer should consider different alternatives of a product and select the most favorable. Interesting for enterprises is also the perspective of the customer, who is often neglected despite increasing customer orientation. The customer interest not the development or production costs, but only the own costs from the acquisition to the disposal. By purposeful information can be communicated to the customer the economic and ecological Vorteilhaftigkeit of the product. A possibility for the reduction of the operating cost of the customers would e.g. be a warranty. It reduces the possibly resulting repair costs. To the reduction of the disposal costs or recycling possibilities contribute. This lowering of the subsequent costs of the customers increases however again the subsequent costs of the producer. Weighing between the individual possibilities is necessary, which could be based on e.g. an Conjoint analysis.

Proceed

Often is to be selected with an acquisition between several alternatives. The Life Cycle Costing regards the initial costs, but also the costs of the use (e.g. personnel costs, maintenance cost (preventive maintenance), repair costs (corrective maintenance), energy and consumption costs"Â…) with the selection not only and the disposal of a product. Contrary to the present value method the resulting payments are made not on the acquisition time abgezinst (bar value), but the actual payments period-specifically comparably. Thus an holistic view of the product and a choice of the most favorable alternative are possible.

Alternative 1 affects first flashes quite favorably, the initial costs is small. If the consumer buys this product, then it sees itself however confronted with high operating and disposal costs. Alternative 2 however makes by the high initial costs a rather expensive impression. Due to the low subsequent costs however a reconciliation, the trade off in such a way specified develops. These trade off can be recognized only by the life-cycle-referred view. The traditional cost calculation is not due to its period referringness in addition able.

Application

Particularly in the ecology-oriented management economics this procedure receives to large Zuspruch due to its holistic view. By the installation course of the operating and disposal costs the principle of the lastingness application finds.

Evaluation

From the comprehensive cost optimization high Einsparpotenziale at costs as well as resources results. The prognosis of the operating and disposal costs is problematic, since these are based only on estimations and empirical values.

See also

• List of the Controllinginstrumente
• Totally Cost OF Ownership

Articles in category "Life Cycle Costing"

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