Integrated Cost Estimation Method


(Deze informatie is alleen beschikbaar in het Engels)   

Life Cycle Cost Budgeting is considered to be one of the most important asset management activities. This, because it defines the financial baseline throughout the life cycle of an asset. Setting up a reliable LCC estimation requires a professional approach i.e. must be carried out by a team of specialists. The LCM-team should be capable of managing this activity.

The aim of the Integrated Cost Estimation (ICE) method is to meet the maintenance plan (excluding the deprecation costs on investment). "Integrated" because the intended LCC estimation is considered to be an integrated activity of separate actors who estimate their products and services in relation to the various installations (functional packages). Moreover the estimations are differentiated over the life cycle of the asset. An system analysis short list is used to work this out in practical spreadsheets.

A conceptual illustration of the developed ICE spreadsheet is given in the table below.

 

Example of an Integrated Cost Estimation spreadsheet.

The ICE spreadsheet shown above has been composed for the 'active service' period. To set up the overall cost estimation the various life cycle periods should be defined. For HNLMS Rotterdam the following life cycle periods, stipulated as status categories, have been defined:

  • Definition and realization;
  • System integration;
  • Active service;
  • Low-level depot maintenance;
  • High-level depot maintenance;
  • Mid-life modernization;
  • Phase-out.

In one or more workshop sessions the approach is worked out which finally results in a well-structured life cycle cost estimation as illustrated in the figure below.

A Life Cycle Cost Estimation based on the ICE spreadsheet data.

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