Introduction to Life Cycle Costing
(LCC)
Introduction:
Life cycle
costs are the summation of project equipment costs from inception to disposal
with consideration for the time cost of money. Finding costs requires knowledge
of the life and death of equipment. The course uses life models developed with
reliability engineering principles. The objective of life cycle cost analysis
is to choose the most cost effective alternative from a series of approaches so
the least long-term cost of ownership is obtained. Decisions are made between
alternatives using net present value concepts. The course shows how to merge
engineering and financial details for cost-effective, long-term, decisions.
This course
covering the use of Life-Cycle Cost (LCC) analyses to communicate solutions to
management and members of the financial community. LCC evaluates many
alternatives to identify the alternative with the least total cost of
ownership. Evaluations are based on the entire cost of ownership including
design, procurement, installation, maintenance, repair, and disposal costs. LCC
analyses are based on the concept of Net Present Value (NPV) and can be
discrete or probabilistic in nature. Participants will learn how to put
reliability engineering skills into financial accounting terms. Each attendee
will also learn techniques to perform real-world studies to evaluate the
sensitivity of assumptions and uncertainties in the LCC model.
Course
Objectives:
By the end of
this course delegates will learn about:
· What Life Cycle
Costing (LCC) is
· Demonstrate
basic Life-Cost Cycle Analysis (LCCA) principles
· Describe how
and in which situations LCCA principles apply
· Explain why
LCCA principles are beneficial
· The difference
between standard costing and LCC
· How to
determine the entire cost of ownership
· How to
calculate net present value (NPV)
· How to quantify
reliability engineering activity into financial terms
· How to perform
real-world LCC studies
· How to present
LCC data to management and the financial community
· What is the LCC
philosophy
· The steps for
performing a LCC analysis
· The concepts of
Net Present Value and Future Present Value
· How to use LCC
to make better asset acquisition decisions
· Communicate the
results of the LCC analysis
· Recognize when
a LCC analysis is warranted
· Test the
assumptions and uncertainties of the LCC analysis
· Become familiar
with financial concepts such as net savings, savings-to-investment ratio,
adjusted internal rate of return, and discounted payback
· Use LCC to
evaluate the varying efficiency levels of competing designs
· How to use LCC
for value engineering to buy the right solution based on long
Who
Should Attend?
Plant,
equipment and reliability engineers, supervisors, and managers with little or
no previous financial experience
Course
Outline:
Introduction to the Basics of Finance
in Reliability
· Definitions and basic concepts
· What is life cycle costing?
· Why is it considered important?
· Different uses of life cycle costing
· Balance sheet
· Profit/loss statement
· Cash flow statement
· Depreciation
· Ratios
How to Do Life Cycle Costing
· How to do it and what to take into account
· Basis of calculations: Net Present Values, LCC metrics
· Factors which influence life cycle costings: discount rates, time,
costs, service life, quantities, components and maintenance
Introduction to Time Value of
Money (TVM)
· Net Present Value (NPV)
· Future Present Value (FPV)
· Return on Investment (ROI)
· Internal Rate of Return (IRR)
Time Value Analysis and Life
Cycle Decision Making
Plant Equipment Project Analysis
· Putting it all together
· Effects and treatments for taxes
Driving Improvement with Life Cycle Cost
| Code | From | To | City | Fee | |
|---|---|---|---|---|---|
| RM07 | 05 Jan 2020 | 16 Jan 2020 | Cairo | US$ 6500 | Book |
| RM07 | 09 Mar 2020 | 20 Mar 2020 | London | US$ 8000 | Book |
| RM07 | 04 May 2020 | 15 May 2020 | Kuala Lumpur | US$ 7500 | Book |
| RM07 | 12 Jul 2020 | 23 Jul 2020 | Dubai | US$ 7000 | Book |
| RM07 | 07 Sep 2020 | 18 Sep 2020 | Istanbul | US$ 7500 | Book |
| RM07 | 09 Nov 2020 | 20 Nov 2020 | California | US$ 9000 | Book |
|
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Certificate of Completion will be provided to the candidate(s) who successfully attend and complete the course. Training hours attendance percentage of 75% is required.
Standard course hours: 8:30 A.M. to 3:30 P.M. Informal discussions: 4:30 P.M. to 5:30 P.M.
We use a blend of interactive and hands-on methods, active participation, a variety of instructional techniques, dynamic presentations, individual and group exercises, in depth discussion, DVD’s, role-plays, case studies, examples. All of the information, competencies, knowledge and skills acquired within our training programs, are 100% transferrable to the participants’ workplace.
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