How to use this tool

This Life Cycle Cost Projection Tool is intended as a step by step guide for the asset management practitioner who would like assistance in developing a life cycle cost projection and subsequent analysis. As the name suggests, a life cycle cost analysis involves the analysis of the costs of a system or a component over a defined period of time or over its entire life span. A Life Cycle Cost analysis allows the Utility to examine projected life cycle costs for comparing competing capital projects and associated O&M strategies and allows for appropriate comparison of alternatives of different investment values and lengths of time.

Like all other tools in the SAM project, no tool can make the building of an asset hierarchy fool proof. While the Tool can facilitate a proper and rigorous approach to the challenge of systematically projecting and analyzing life cycle costs, each engagement of the Tool will require the application of systematic judgment and experience at every step.

This Tool combines step by step process guidance with substantive content about each step and associated task in projecting and analyzing life cycle costs.

Tasks

The process of developing life cycle cost projection is broken down into three distinct steps in this Tool; each step has several tasks associated with it. These steps are listed on the left of the Tool screen in a “navigation bar”; an associated process diagram depicting the entire process (all three steps in one decision diagram) is presented to the right of the navigation bar (see figures below).

For those who are familiar with the content relevant to a particular task, the text associated with that task can be bypassed. For those unfamiliar, or simply a bit rusty, content associated with each task is available at the click of the mouse by clicking on the box representing a specific task or decision node.

To return to the process diagram screen, simply click the word “back” at the bottom left portion of the relevant text page.

The Life Cycle Cost Projection Excel Workbook

Each of the WERF SAM tools contains one or more “core tools”. Core tools take the form of an Excel spreadsheet or a Word document. In this Tool, the core tool takes the form of an Excel spreadsheet. This spreadsheet is accessed by simply clicking on the core tool icon (in this case the pink colored spreadsheet icon – see graphic following)

Because no one set of templates or spreadsheets can begin to capture all of the elements that relate to the virtually infinite number of unique variations and possibilities that a case specific analysis could trigger, all worksheets in this Tool are intended as starting points around which a life cycle cost analysis can be crafted. The worksheets in the workbook are not protected so that users may copy and modify as desired. It is rather unlikely that a thorough and carefully considered hierarchy design for a given “real-world” application will take the exact form of the core documents contained in the Tool without modification.

The templates and workbook or separate worksheets may be copied out of the tool and applied as relevant on its/their own merits.

Worked Examples

As further assistance to the practitioner, two worked examples are available for review by clicking “Worked Examples” on the navigation bar.