6.

0 Life Cycle Cost

Sum of all recurring and one-time (non-recurring) costs over the full life span or a
specified period of a good, service, structure or system. In includes purchase price, installation
cost, operating costs, maintenance and upgrade costs and remaining (residual or salvage) value
at the end of ownership or its useful life.

6.1 Life Cycle Cost Analysis (LCCA)

The purpose of an LCCA is to estimate the overall costs of project alternatives

and to select the design that ensures the facility will provide the lowest overall cost of
ownership consistent with its quality and function. The LCCA should be performed
early in the design process while there is still a chance to refine the design to ensure a
reduction in life-cycle costs (LCC).

Month Commitment Cost Cumulative Potential for Life-

(RM) Committed Life- Cycle Cost Savings
Cycle Cost (RM) (RM)
0 0 0 1,000,000.00
1 20,000.00 20,000.00 980,000.00
2 50,000.00 70,000.00 930,000.00
3 80,000.00 150,000.00 850,000.00
4 60,000.00 210,000.00 790,000.00
5 70,000.00 280,000.00 720,000.00
6 55,962.40 335,962.40 664,037.60
7 80,880.00 416,842.40 583,157.60
8 80,900.00 497,742.40 502,257.60
9 70,000.00 567,742.40 432.257.60
10 90,999.00 658,741.40 341,248.60
11 80,000.00 738,741.40 261,258.60
12 80,000.00 818,741.40 181,258.60
 1 YEAR COSTS OF SILK HIGHWAY
1200000
1000000
800000
600000
400000
200000
0
0 1 2 3 4 5 6 7 8 9 10 11 12

Commitment Cost (RM)

Cumulative Committed Life-Cycle Cost (RM)
Potential for Life-Cycle Cost Savings (RM)

Figure 1: Viewed over a 1 year period of Commitment Cost, Cumulative Committed Life-
Cycle Cost and Potential for Life-Cycle Cost Savings.