LCCA - Life Cycle Cost Assessment
LCCA vs LCA
Life Cycle Cost Assessment (LCCA) has a lot of overlap and can be confused with Life Cycle Assessment (LCA) due to the similar acronym. LCA focuses on the environmental impact (energy, extraction, operation, etc) of the architectural system or product.
- LCA = Environmental Impact
- LCCA = Economic Impact
- Note: Assessment and analysis are used somewhat interchangeably in the titles.
Introduction
Life Cycle Cost Assessment (LCCA or LCC) calculates the total economic impact of a product, building, or building component throughout its entire life cycle or period of time (typically in years). It's essentially a method of evaluating the total cost of something over a period of time, including its initial cost, operations, maintenance, replacement, disposal, and taxes/financing.
- Example: Comparing the cost of buying, operating, and then replacing an object after X amount of years vs paying for a higher quality, more expensive object and replacing it Y number of years.
Study Period: The period of time for the LCC
- Duration of the study period varies with needs of the client and the anticipated usefulness of an item.
- Common to account for inflation and adjust for future time or past when considering the study period.
Sunk Costs: Costs and expenses that have been incurred prior to baseline date and cannot be recovered.
- These are ignored during the LCC. For example, having to spend more money to expedite the shipping in order to receive the product by X date for opening. This is a sunk cost.