Life Cycle Cost Optimization Within Decision Making on Alternative Designs of Public Buildings

Abstract

The purpose of this paper is to highlight the role of the life cycle cost criterion in deciding on the proposals of construction projects. Owners commonly use construction cost minimization. In order to achieve the maximum value for money all costs incurred over the whole life span must be evaluated. The optimization of the life-cycle cost of a project, construction, and equipment is essential for a complex decision-making process. Then, the solution with the minimum value of the life-cycle cost can be chosen. Life cycle costing (LCC) is a method of economic analyzing of all costs related to constructing, operating, and maintaining a construction project over a defined period of time. Having the costs and savings we can then directly compared these areas and be fully informed when decisions are made. Nevertheless, LCC is not commonly applied to construction projects in Europe or USA. The greatest benefit of life cycle costing can be obtained in the initiation phase of construction projects. The paper summarizes the issues of life cycle costing (LCC) and analyzing. The paper presents the most frequently used methods of cost calculating. The paper also clarifies the necessary data and a suitable process of life cycle costing is proposed. The paper presents the results of a survey focused on the use of LCC by public owners and developers. Decision-making using the LCC optimization is demonstrated in the case study. This case study is a public building. The client's benefits of integrating LCC into decision-making processes within project preparation are summarized in the conclusion.

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