Lifecycle cost analysis

Lifecycle cost (LCC) analysis is a tool that can be used to evaluate the long-term economic merits of alternative design solutions. Sometimes different design alternatives have different effects on everyday operating costs, ongoing maintenance requirements, energy consumption and replacement cycles of components. To evaluate these alternatives by simply adding up all these costs (both initial costs and subsequent long-term costs) is not sufficient because it ignores both the effects of future cost inflation and the value of money. For these reasons, it may produce distorted results.