Life Cycle Costing Clarion Technical Conferences

Life Cycle Costing Course
March 17-18, 2005

Instructor: Paul Barringer, Barringer & Associates

The Life Cycle Costing course covers fundamentals of how to cost projects and optimize equipment selection while taking into account equipment survival/failure and the total cost incurred during the project life. LCC are summations of cost estimates from inception to disposal for both equipment and projects as determined by an analytical study and estimate of total costs experienced during their life. The objective of LCC analysis is to choose the most cost-effective approach from a series of alternatives so the least long-term cost of ownership is achieved.

The course focuses on the economic selection of equipment considering:

Equipment grades and cost,
Life-limiting conditions for installation,
Life-limiting conditions from operating practices, and
Life-limiting conditions from maintenance practices.

Analyses are summarized in a net present value (NPV) format by Monte Carlo simulation for taking into account variations and by Excel spreadsheets for simple models-spreadsheet models will be presented to the Students. The model provided with the course can be altered to reflect many different types of equipment. Students are encouraged to use the model as a basic building block for equipment in a plant so that capital equipment decisions can be made logically and quickly with updates for prices and life-performance.

Simulation softwareis provided to simulate equipment failures and finding the cost of replacements over many years. The course emphasizes making long-term cost of ownership decisions rather than only choosing the lowest first cost. Students learn how to merge cost data and reliability data for making profit-driven business decisions.

Topics

Life cycle cost definitions
Why use LCC?
Alternatives for engineering considerations
Sustaining cost templates
Effectiveness equation trade-off tools for LCC
Reliability
Capability
LCC facts driven by data
Alternatives with acquisition/sustaining costs
Choosing the analytical cost model
Cost profiles for each year of study
Pareto charts of vital few cost contributors
Risk of high cost items and occurrences
Adding uncertainty to the LCC results
How both end-user and suppliers use LCC
Economic business facts of life for engineers
Discounted cash flow and net present value
Acquisition cost templates
SAE LCC cost template
Availability
Maintainability
Defining the LCC problem
Preparing the cost breakdown tree
Gathering cost estimates and cost models
Break-even charts for alternatives
Sensitivity analysis of high cost items
Selecting preferred course of action
Performing NPV Monte Carlo simulations
Using NPV and the effectiveness trade-offs

Benefits of attending

Subjects discussed in the course are generally connected to money issues. Engineers will learn enough accounting and business principles to communicate with accountants. Because few accountants are willing to learn the engineering details for reliability calculations, engineers must learn enough cost details to improve their teamwork with accountanting and financial professionals. LCC helps engineers think like MBAs and act like engineers for profit-making enterprises.

Who gains

Maintenance and reliability professionals, reliability engineers and technicians, maintenance managers, engineering supervisors, operating engineers, facility managers.

Continuing Education Units

Upon completion of the course, participants will be eligible to receive 1.1 Continuing Education Units (CEUs).

CLARION
3401 Louisiana Street
Suite 255
Houston, Texas 77002
Tel. +1 (713) 521-5929 Fax +1 (713) 521-9255

Weibull Analysis Workshop and Life Cycle Costing Course