Course content

Many products have long lives and a significant part of the costs are incurred after sales (design, engineering, procurement, production, assembly, transportation, maintenance, repair and so on). To address this, there are several approaches that are used that will be discussed. They can be generally referred to as Life-Cycle Costing (LCC) approaches, and important key elements are:

• Cost models and analysis
• Cost elements

• Investment analysis
• LCC as engineering tool
• LCC as management tool
• Uncertainty analysis
• Levelized Cost of Energy (LCOE).

Learning outcome

Learning outcomes - Knowledge:

After concluding the project the student should know the methodology and main principles of Life-Cycle-Cost Management.     

Learning outcomes - Skills:

The student should be able to carry out any cost estimation task using available information, modelling uncertainty, necessary guides and books as well as understand and interpret the results.  

Learning outcomes - General qualifications:

The student will learn about Activity-Based Costing, various Life-Cycle Costing methodologies, Monte Carlo simulations, modelling uncertainty, Economic Profit calculations as well as Net Present Value estimations.  The student will learn how to combine these approaches to produce the best overall cost management advice to a decision-maker.

Learning methods and activities

Class with a mix of lectures and exercises.

Specific conditions

Recommended previous knowledge

The following one course is required System Engineering.

Priority will be given to students from the MSc. in Systems Design and Engineering program.

Course materials

The course material will cover all. Those with a particular interest in the subject area are recommended to review Emblemsvåg, J. (2003). Life-Cycle Costing: Using Activity-Based Costing and Monte Carlo Methods to Manage Future Costs and Risks. Hoboken, NJ, John Wiley & Sons.p. 320.