LIFE CYCLE

COSTING (LCC)
By Vikas Singh
PGDM +MBA
2010-12

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 MEANING
 Sum of all recurring and non-recurring costs
over the full life span or a specified period of
a good , service, structure, or system. In
includes purchase price ,
installation cost, operating
costs , maintenance and upgrade costs, and
remaining (residual or salvage) value at the
end of ownership or its useful life.

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EXPLANATION WITH HELP OF
PRODUCT LIFE CYCLE ……
 Introduction
 Growth
 Maturity
 Decline

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LIFE CYCLE COSTS IDENTIFICATION

 Construction
 Maintenance
 Operation
 Occupancy
 End of Life

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 1.CONSTRUCTION
 Construction works costs
 Other construction related costs ( design
fee , planning cost , contribution etc.)

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 2.MAINTENANCE COSTS
 Major replacement
 Subsequent adaptation
 Minor replacement, repairs and maintenance
 Unscheduled replacement, repairs and
maintenance
 Grounds maintenance

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 3.OPERATION
 Cleaning
 Utilities
 Administrative costs
 Overheads costs
 Taxes

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 4.OCCUPANCY COSTS
 Internal moves
 Reception and customer hosting
 Security
 Helpdesk

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 5.END OF LIFE COSTS
 Disposal
 Demolition
 Reinstatement to meet contractual
requirements

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BENEFITS
 Early action to generate revenue
 Better decision
 Promote long term rewarding in contrastof
short term profitability
 Provide overall total incremental cost over
the entire span of the product

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THANK YOU

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