Life Cycle Cost Analysis: Actual Problem in Industrial Management

Elmakis, David; Lisnianski, Anatoly

doi:10.3846/16111699.2006.9636115

Cited by 16 publications

(10 citation statements)

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“…During the lifecycle of expensive capital goods, different cost factors must be considered. Elmakis and Lisnianski (2006) differentiate between following cost categories: development costs, production costs, operation and service costs, and disposal costs. In this section, we describe how consolidation with AM may change these cost categories and explain how these changes are regarded in our model.…”

Section: Effects Of Consolidation On Lifecycle Costsmentioning

confidence: 99%

Consolidating spare parts for asset maintenance with additive manufacturing

Knofius

Heijden

Zijm

2019

International Journal of Production Economics

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Consolidation of parts is the redesign of an assembled component with fewer, but therefore more complex parts. While complex parts are often difficult to produce with conventional manufacturing (CM) technologies, the high degree of design freedom of additive manufacturing (AM) facilitates consolidation. Typically, consolidation with AM is chosen because of its functional befits such as weight reductions. Consequences for asset maintenance, however, are not that well understood. For example, the spare part management may profit from potentially shorter resupply lead times of AM, but may suffer from more expensive consolidated parts having to be stocked in anticipation of random failures. Together with a different price and failure rate of AM components, this complicates the decision whether AM should be used to consolidate a spare part. In this paper, we analyze the total costs of consolidation with AM, including logistics, manufacturing and repair costs. Our results suggest that consolidation with AM often leads to higher total costs. This finding mainly stems from loss of flexibility. For example, the repair of a component by replacing the defective sub-component only is no longer possible. Furthermore, short resupply lead times for the consolidated spare part turn out to be less beneficial than perceived and therefore relativize the benefit of consolidation with AM. Overall, these findings stress the necessity to adopt a total costs perspective when judging the effects of AM on spare parts management. Otherwise, consolidation may lead to unforeseen effects which may render its application debatable, even despite substantial functionality improvements.

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Section: Effects Of Consolidation On Lifecycle Costsmentioning

confidence: 99%

Consolidating spare parts for asset maintenance with additive manufacturing

Knofius

Heijden

Zijm

2019

International Journal of Production Economics

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“…Life Cycle Costs are described as "cradle-to-grave" costs summarized as an economic model of evaluating alternatives for equipment and projects [8]. [9] defined LCC as the total cost of acquiring and utilizing a system over its entire life span, in other words LCC is the total cost of procurement and ownership. More detailed definitions are proposed by [10] -Life cycle cost is the total cost of ownership of machinery and equipment, including its cost of acquisition, operation, maintenance, conversion, and/or decommission -and [11] -LCC are summations of cost estimates from inception to disposal for both equipment and projects as determined by an analytical study and estimate of total costs experienced in annual time increments during the project life with consideration for the time value of money.…”

Section: State Of the Artmentioning

confidence: 99%

Introduction to a Model for Life Cycle Optimisation of Industrial Equipment

Cerri

Contaldo

Taisch

et al. 2014

IFIP Advances in Information and Communication Technology

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Part 6: Industry and Consumer ProductsInternational audienceIn this evolving context, to pursue a Life Cycle approach, realizing green products / system at the less cost of ownership, can be a strategic key for Advanced Countries companies to compete and survive in the global market. Aim of this paper is to present a model for Life Cycle Optimisation, considering both economic and environmental dimensions. At the end of the paper a first applica- tion of this model will be presented

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“…Schematically, the PLC can be approximated by a bell-shaped curve that is divided into several stages. The PLC is typically depicted as a unit sales curve of a product category over time [7][8][9][10][11][12][13][14][15][16]. Another important issue faced by firms is the vendor selection (VS) problem.…”

Section: Introductionmentioning

confidence: 99%

“…The concept of PLC cost (PLCC) originates from the US Department of Defense and is focused on a product's entire value chain from a cost perspective since the development phase of a product's life, through design, manufacturing, marketing/distribution and finally customer services [8]. Elmark and Anatoly (2006) indicated that the PLCC is the total cost of acquiring and utilizing a system over its complete life span [10]. Vasconcellos and Yoshimura (1999) proposed a breakdown structure to identify the main activities for the active life cycle of automated systems [11].…”

Section: Introductionmentioning

confidence: 99%

Considering Product Life Cycle Cost Purchasing Strategy for Solving Vendor Selection Problems

Shen

Peng

2019

Sustainability

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The framework of product life cycle (PLC) cost analysis is one of the most important evaluation tools for a contemporary high-tech company in an increasingly competitive market environment. The PLC-purchasing strategy provides the framework for a procurement plan and examines the sourcing strategy of a firm. The marketing literature emphasizes that ongoing technological change and shortened life cycles are important elements in commercial organizations. From a strategic viewpoint, the vendor has an important position between supplier, buyer and manufacturer. The buyer seeks to procure the products from a set of vendors to take advantage of economies of scale and to exploit opportunities for strategic relationships. However, previous studies have seldom considered vendor selection (VS) based on PLC cost (VSPLCC) analysis. The purpose of this paper is to solve the VSPLCC problems considering the situation of a single buyer–multiple supplier. For this issue, a new VSPLCC procurement model and solution procedure are derived in this paper to minimize net cost, rejection rate, late delivery and PLC cost subject to vendor capacities and budget constraints. Moreover, a real case in Taiwan is provided to show how to solve the VSPLCC procurement problem.

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Life Cycle Cost Analysis: Actual Problem in Industrial Management

Cited by 16 publications

References 0 publications

Consolidating spare parts for asset maintenance with additive manufacturing

Consolidating spare parts for asset maintenance with additive manufacturing

Introduction to a Model for Life Cycle Optimisation of Industrial Equipment

Considering Product Life Cycle Cost Purchasing Strategy for Solving Vendor Selection Problems

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