Article on Life Cycle Costing published

BY: TANJA SREBOTNJAK, Hixon Center Director

Hixon Center director, Tanja Srebotnjak, has published a piece on Life Cycle Costing (LCC) in Springer Nature’s Encyclopedia of Sustainability in Higher Education. LCC is an evaluation method and decision-making tool that considers the total monetary costs (and benefits) related to a product’s life span such as a building or a car. It facilitates choosing among different product alternatives by optimizing total net present value. By considering the full life cycle of the product, it broadens the horizon beyond the initial costs to purchase or build the product. LCC is similar to Life Cycle Assessment (LCA), but it is noted that optimizing for LCC does not equate to optimizing for life cycle impacts according to an LCA. The main steps of an LCC are (1) defining the cost elements of interest, (2) defining the costs structure to be used, (3) establishing the cost estimating relationships, and (4) establishing the method of LCC calculation. LCC originated in the U.S. military procurement system in the 1960s but has since expanded to other industries dealing with physical assets. In life cycle-based sustainability assessment, LCC is one of three components, the other two being environmental LCA and social LCA.