Developing a decision support tool for life‐cycle cost assessments

Abstract

Recent years have seen advancements in the development and use of life-cycle assessment (LCA) analytic techniques. Although these techniques have highlighted the power of LCA to identifj, the environmental consequences of a product system through its entire life cycle, they have also highlighted a major shortcoming ofLCA-the lack of cost information. Because companies make daily decisions that involve trade-ors between economics and the environment, including cost information in LCA is critical for advancing its use as an overall environmental decision-making tool. This article outlines the current state of LCA methodology development, defines key life-cycle cost assessment terms and concepts, and evalriates existing cost assessment techniques with the objective of building an integrated life-cycle cost assessment tool.

Product life cycle cost analysis: the impact of customer profiling, competitive advantage, and quality of IS information

“…Moreover, the US EPA (1995) has made it clear that it believes an analysis of life cycle costs is an effective interface between environmental regulation and organizational interests. Weitz et al (1994) emphasized that environmental costs associated with life cycle stages potentially influence product design, operations and maintenance decisions, recycle and reuse activities, as well as disposal methods. Shrivastava (1992) stressed that environmental issues may also have strategic consequences for firms in terms of their product choices.…”

“…Third, to improve the assessment of product profitability (Hansen and Mowen, 1992), and fourth, to aid in the design of more environmentally desirable products (Kreuze and Newell, 1994;Madu et al, 2002). Fifth, life cycle cost analysis is argued to facilitate an understanding of the environmental impact of products from development through manufacture, distribution, customer use, disposal and potential recycling (Sutton, 1992;Weitz et al, 1994;Brady et al, 1999). Sixth, to focus on post-sale factors that have become a larger percentage of life cycle costs, including warranty, cost of parts, service and maintenance, as well as being increasingly important to customers in their purchasing decisions (Shields and Young, 1991;Murthy and Blischke, 2000).…”

Environmental life cycle costs in the Australian food packaging supply chain

“…In principle it is a methodology that allows costs that occur at various stages of the 'life cycle' to be calculated. The life cycle costing definitions that were supplied by the researcher to the interviewees during the interviews are those by Weitz et al (1994) and White et al (1996) (Table 3.5).…”

“…Intemal costs are those directly incurred by an organisation (e.g., capital, labor, energy and regulatory compliance costs). Extemal costs are those not directly incurred by the organisation (e.g., resource depletion, water contamination, and human health effects)" (Weitz et al 1994).…”

“…(Weitz et al 1994;White et al 1996; US EPA 1998b) Parker (1998) undertook an exploratory study of environmental issues and costing approaches in eleven Australian companies^ operating in the manufacturing, mining, petrochemical, power and horticultural industries. He found that most of the ^ Externalities are also known as external costs.…”