Life-cycle cost analysis (LCCA): a comparison of commercial flooring

Purpose The business case for facility expenditures is grounded in the knowledge that life-cycle economics is significant to the continued viability of the facility. The aim of this study is to develop an algorithm for life-cycle cost analysis (LCCA) and evaluate flooring products to inform decision makers about the long-term cost of ownership. Design/methodology/approach The protocol for executing an LCCA is defined by the National Institute of Standards and Technology, including defining the problem, identifying feasible alternatives and establishing common assumptions and parameters, as well as acquiring financial information. Data were provided by an independent third-party source. Findings The results of this study are twofold: assess functionally equivalent flooring alternatives to determine the best financial value and develop a replicable protocol and algorithm for LCCA. The study found that modular carpet was the best financial solution. As a tool for decision makers, this LCCA informs asset management about the long-term cost of ownership, providing a protocol for making practical, informed decisions for the lowest cost solution for functionally equivalent alternatives. Research limitations/implications Projecting LCCA beyond 15 years may have limited value based on potential changes in the financial climate. Further research should focus on the implications of changes in the discount rate over time and testing the algorithm on other building systems. Practical implications Maintenance costs are considerable when compared to initial cost of flooring. Equipment costs have a significant impact on long-term cost of ownership. Using LCCA to inform specifications and to determine the best solution for a building system such as flooring provides an evidence-based process for building design and facility management. Social implications Life-cycle costs have a significant impact on the financial health of an organization. Using LCCA to make informed decisions about facility design and specifications may contribute to increased financial stability and resources to benefit the organization’s long term goals. Originality/value This study contributes an algorithm instrument for buildings and building systems. The flooring tested with this protocol provides evidence to inform flooring selection based on lowest cost while considering other factors that inform appropriate selection of flooring materials.

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A life-cycle cost analysis for flooring materials for healthcare facilities

Journal of Hospital Administration ◽

10.5430/jha.v4n4p92 ◽

2015 ◽

Vol 4 (4) ◽

pp. 92 ◽

Cited By ~ 6

Author(s):

Debra D. Harris ◽

Lori Fitzgerald

Keyword(s):

Life Cycle ◽

Cost Analysis ◽

Life Cycle Cost ◽

Product Information ◽

Life Cycle Cost Analysis ◽

Healthcare Facilities ◽

Cost Of Ownership ◽

Flooring Materials ◽

Over Time

Objective: In this study, hard, resilient and soft flooring materials are compared using a building service life of 50 years, an established life span for healthcare facilities. The purpose of this study is to evaluate the life-cycle cost of flooring products and inform decision-makers about the long-term cost of ownership along with other key factors, such as safety, durability, and aesthetics.Methods: The protocol for executing an life-cycle cost analysis (LCCA) is defined by the National Institute of Standards and Technology (NIST), including defining the problem, identifying feasible alternatives, and establishing common assumptions and parameters, as well as acquiring financial information. Product information for the flooring materials that met inclusion criteria based on characteristics of the products consistent with use in healthcare facilities was acquired including maintenance, installation, warranty, and cost data. LCCA calculations recognize the time value of money and use discounting to project future value.Results: The results generated from the LCCA using present value to project future costs provide a useful tool for projecting costs over time for the purpose of planning operational and maintenance costs associated with the long-term investment of ownership. The findings suggest that soft flooring is more cost effective for initial purchase and installation, equipment assets, and maintenance over time of facilities.Conclusions: Cost is an important factor when considering flooring materials for healthcare facilities. Other factors to be considered are safety, durability and aesthetics, cleanliness, acoustics and sustainability to realize the overall return on investment. This study developed a tool for projecting costs of ownership for facility materials, in this case, flooring. The selection of flooring material has a significant impact on the cost of ownership over the life of the facility.

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A Performance-Specified and Reliability-Based Approach for Life-Cycle Cost Analysis of Long Term Pavement Maintenance Contracts

Advanced Materials Research ◽

10.4028/www.scientific.net/amr.723.721 ◽

2013 ◽

Vol 723 ◽

pp. 721-728

Author(s):

Jih Chiang Lee ◽

Jyh Dong Lin ◽

Chin Rung Chiou ◽

Han Yi Wang

Keyword(s):

Life Cycle ◽

Cost Analysis ◽

Life Cycle Cost ◽

Risk Estimation ◽

Life Cycle Cost Analysis ◽

International Roughness Index ◽

Pavement Maintenance ◽

Performance Specification ◽

Pavement Deterioration

The objectives of this paper are to present the feasibility of utilizing reliability-based method to quantify life-cycle cost associated with performance specification. And a framework develops for quantifying the life-cycle cost. The framework consists of three components: (1) the pavement deterioration performance prediction; (2) the reliability-based risk estimation; and (3) the life-cycle cost analysis. An example is illustrated using the International Roughness Index (IRI) data to demonstrate how the approach works. The approach has potential for use in valuation of long term pavement maintenance contracts.

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Life-cycle cost analysis of a short-haul underground freight transportation system for the DFW Airport

Built Environment Project and Asset Management ◽

10.1108/bepam-10-2018-0125 ◽

2019 ◽

Vol 9 (3) ◽

pp. 440-456

Author(s):

Seyed Ehsan Zahed ◽

Sirwan Shahooei ◽

Ferika Farooghi ◽

Mohsen Shahandashti ◽

Siamak Ardekani

Keyword(s):

Life Cycle ◽

Cost Analysis ◽

Life Cycle Cost ◽

Freight Transportation ◽

Cash Flows ◽

Research Approach ◽

Life Cycle Cost Analysis ◽

Content Type ◽

The Cost ◽

Cost Components

Purpose The purpose of this paper is to conduct life-cycle cost analysis of a short-haul underground freight transportation (UFT) system for the Dallas Fort Worth international airport. Design/methodology/approach The research approach includes: identifying the cost components of the proposed airport UFT system; estimating life-cycle cost (LCC) of system components using various methods; determining life-cycle cash flows; evaluating the reliability of the results using sensitivity analysis; and assessing the validity of the results using analogues cases. Findings Although the capital cost of constructing an airport UFT system seems to be the largest cost of such innovative projects, annual costs for running the system are more significant, taking a life-cycle perspective. System administrative cost, tunnel operation and maintenance, and tunnel construction cost are the principle cost components of the UFT system representing approximately 46, 24 and 19 percent of the total LCC, respectively. The shipping cost is estimated to be $4.14 per ton-mile. Although this cost is more than the cost of transporting cargos by trucks, the implementation of UFT systems could be financially justified considering their numerous benefits. Originality/value This paper, for the first time, helps capital planners understand the LCC of an airport UFT system with no or limited past experience, and to consider such innovative solutions to address airport congestion issues.

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Suitability of life cycle cost analysis (LCCA) as asset management tools for institutional buildings

Journal of Facilities Management ◽

10.1108/14725961011058811 ◽

2010 ◽

Vol 8 (3) ◽

pp. 162-178 ◽

Cited By ~ 9

Author(s):

Anurag Shankar Kshirsagar ◽

Mohamed A. El‐Gafy ◽

Tariq Sami Abdelhamid

Keyword(s):

Life Cycle ◽

Cost Analysis ◽

Asset Management ◽

Life Cycle Cost ◽

Management Tool ◽

Maintenance Cost ◽

Life Cycle Cost Analysis ◽

Average Difference ◽

Content Type

PurposeThe purpose of this paper is to evaluate the accuracy of life cycle cost analysis (LCCA) for institutional (higher education) buildings as a predictor of actual realised facility costs.Design/methodology/approachResearch methodology includes a comprehensive literature review to identify issues, best practices and implementation of LCCA in the construction industry. A case study was conducted to evaluate the accuracy of LCCA in predicting facility costs.FindingsNotwithstanding the benefits of LCCA, its adoption has been relatively slow for institutional buildings. The case study revealed that the average difference between estimated and actual construction cost is 37 per cent, whereas the average difference between the actual and estimated maintenance cost is 48 per cent. There is an average difference of 85 per cent in the actual and estimated administration cost.Research limitations/implicationsWhile limited to a few buildings, the case study underscores that LCCA methods should not be used for cost predictions of facility performance but rather for comparing total costs of alternative building features and systems, as well as building types. Sensitivity analysis also revealed that the selection of a discount rate would have less impact on recurring costs estimates compared to non‐recurring cost estimates. Facilities managers' involvement in LCCA technique developments and implementations will likely improve its performance during programming phases.Practical implicationsThe value of LCCA procedures is limited as a predictor of actual realised facility costs. Educational institutions can use the methods described in this paper to replicate the study and arrive at their own conclusions regarding the LCCA techniques and their potential use in programming stages.Originality/valueThe paper evaluated the accuracy of LCCA for institutional buildings and the potential of LCCA as an asset management tool for institutional buildings and provided suggestions to improve its adoption in facilities management.

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Life-Cycle Cost Analysis of a Low-Volume Road Bridge Alternative

Transportation Research Record Journal of the Transportation Research Board ◽

10.3141/1696-37 ◽

2000 ◽

Vol 1696 (1) ◽

pp. 8-13 ◽

Cited By ~ 3

Author(s):

M. E. Fagen ◽

B. M. Phares

Keyword(s):

Life Cycle ◽

Cost Analysis ◽

Life Cycle Cost ◽

Primary Objective ◽

Steel Beams ◽

Steel Beam ◽

Life Cycle Cost Analysis ◽

Cost Models ◽

Low Volume

Life-cycle cost models offer engineers a means to evaluate the anticipated long-term economic performance of prospective design and construction alternatives. Traditionally, only initial investment costs and past experience were used to economically evaluate possible bridge designs. A more logical approach requires that all short- and long-term costs be considered in relation to project location, purpose, and performance specifications. The primary objective of life-cycle cost analysis is to evaluate the total ownership cost of all suitable alternatives. Recent reports indicate that a significant number of the nation’s bridges are either structurally deficient or functionally obsolete. In Iowa, a large portion of these types of bridges are on the secondary road system and fall under the jurisdiction of county engineers. Typically, Iowa county engineers have limited resources. In response to this, a bridge-replacement system was developed that county engineers can design and build with limited staff. The system, which is made up of precast (PC) double T units, involves the fabrication of PC units that consist of two steel beams connected by a thin concrete deck. To illustrate that this bridge system may be an economically viable bridge-replacement alternative for use on low-volume county roads, a life-cycle cost analysis was completed for an actual replacement-repair-rehabilitation project. Various alternatives were economically analyzed and compared with the steel beam PC unit bridge alternative. This analysis indicates that, when lower-cost salvaged steel beams and county work forces are used, the steel beam PC unit bridge can be a viable low-volume road bridge alternative.

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Incorporating Variability into Pavement Performance, Life-Cycle Cost Analysis, and Performance-Based Specification Pay Factors

Transportation Research Record Journal of the Transportation Research Board ◽

10.1177/0361198105194000102 ◽

2005 ◽

Vol 1940 (1) ◽

pp. 13-20 ◽

Cited By ~ 1

Author(s):

Leanne Whiteley ◽

Susan Tighe ◽

Zhanmin Zhang

Keyword(s):

Life Cycle ◽

Service Life ◽

Cost Analysis ◽

Life Cycle Cost ◽

Service Performance ◽

Pavement Performance ◽

Life Cycle Cost Analysis ◽

Asphalt Overlay ◽

Design Life

This paper describes a recent research study that examined how changes in design life affected the pavement life-cycle cost and ultimately how the reduction in or addition to life-cycle cost attributed to superior or inferior in-service performance could be used as a basis for establishing a pay factor for a performance-based specification. Previous models were developed with data from the Canadian Long-Term Pavement Performance Program, which indicated that overlay thickness, total prior cracking, annual freezing index, annual days with precipitation, and accumulated equivalent single-axle loads (ESALs) after 8 years affected the slope of pavement deterioration for asphalt overlay pavements. One of these models, as well as data from the U.S. Long-Term Pavement Performance test sites, is used to determine the service life of asphalt overlay pavements. This paper examines how the variability associated with overlay thickness, total prior cracking, and accumulated ESALs after 8 years affects the service life of asphalt overlay pavements. Furthermore, this paper considers the variability associated with the discount rate and incorporates all associated variability into the life-cycle cost analysis (LCCA). LCCA is performed by using Monte Carlo techniques. On the basis of a recent study, distributions for service life and life-cycle costs are developed by using both normal and lognormal distributions for overlay thickness. With the LCCA values for typical design lives, a sensitivity analysis is subsequently performed to evaluate the impact of 10%, 20%, and 30% differences in the in-service performance as compared to the design life. These LCCA differences are then used as a basis for establishing pay factors. Overall the paper attempts to relate design to in-service performance life-cycle cost and the ultimate use of pay factors.

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