Life Cycle Cost Analysis Example

Life cycle costing is a technique that is used to assess environmental impacts that are linked with the product life stages from manufacturing to consumption that is from raw material acquisition to processing or manufacture, distribution, consumption, maintenance and repair (Epstein & Buhovac, 2014). It shows and some of the environmental concerns associated with the product life (Koroluk, 2012).

The AHRQ organization has several portfolios’ that are funded and supports research projects. Such portfolios are information technology, health patient safety, prevention and care management, and value portfolios. Within these portfolio’s, grants are there to fund new projects that relate to each category. Within each portfolio, research has been started and effectiveness of these projects is underway. Some clinical research projects are a set of priority conditions of importance to the Medicaid, Medicare, and SCHIP programs. Projected initiatives are to improve quality of care. The Value portfolio finds ways to reduce unnecessary cost and waste while maintaining or improving quality without adding cost which is a critical, national need (2012, p.5).

The purpose of my lifecycle assessment is to reduce the energy consumption of the lighting within my home by changing the light bulbs from CFL to LED. While, CFL are more efficient than the old traditional incandescent light bulbs, LED are more efficient and use less energy than both. Their initial cost is higher but will last longer and save more money in the long term. CO2e (Carbon dioxide emissions) during production, manufacturing, operating, and disposal are going to be analyzed. There are currently 10 CFL light bulbs within the house as discussed in assignment one. Each one of these would be replaced with a LED light bulb. The resources to produce and transport the LEDs and the resources required to dispose of CFLs need to be considered

Presently, cost and quality in health care are both indicators that are benchmarked in determining best healthcare practice. Two organizations both work towards meeting these objectives in healthcare, The Agency for Healthcare Research and Quality (AHRQ), a public agency and the Commonwealth Fund, a private agency.

Number of skus was considered driver for Technical Support. The product weight was considered driver of resource consumption only for General & Administrative costs. Moreover, materials and direct labor were allocated based on the bill of materials and routings (exactly the way they were allocated in Standard Costing system). Finally, Material Handling & Setup, Order Processing and Production Planning were driven to products using number of orders. Consequently, ABC solves the major issue regarding the Standard Costing system: the assumption that all overhead costs can be included into one cost pool. All the drivers are summarized in exhibit 3. Exhibits 4 and 5 present respectively the ABC drivers and allocation rates.

Of all the noteworthy elements of logistics support, maintenance planning tends to be the one element that has the greatest influence on the other support elements as well as on the actual design of the end item. It is imperative that the user identifies a maintenance concept as soon as possible, preferably in the conceptual study phase, and that the acquisition community scrutinizes the concept for feasibility and affordability.

4. Develop and diagram an Activity Based cost model using the information in the case Provide your best estimates about the cost and profitability of Wilkerson’s three product lines. What difference does your cost assignment have on operated product costs and profitability? What causes any shifts in cost and profitability?

The company uses the weighted-average cost method in its process costing system. The ending inventory is 50% complete with respect to conversion costs.

Life Cycle Costing (LCC) is an important economic analysis used in the selection of alternatives that impact both pending and future

1. What is the competitive situation faced by Wilkerson? The critical product in term of market competition is the pumps of Wilkerson Company. The pumps are Wilkersons major product line with a production of about 12,500 units per month. Pumps currently have the lowest gross margin among all products, because competitors had been reducing prices on pumps and Wilkerson adopted its prices in order to remain competitive and to maintain the volume. 2. Given some apparent problems with Wilkersons cost system, should executives abandon overhead assignment to products entirely by adopting a contribution margin approach in which manufacturing overhead is treated as a period expense? Our conclusion is, that they should not adopt

In recent years the acquisition community has changed its weapons system sustainment nomenclature from acquisition logistics to life cycle logistics and, to its most current iteration, product support. As noted by the Defense Acquisition Guidebook, “Performance-Based Logistics (PBL) is the preferred Department of Defense product support strategy to improve weapon system readiness by procuring performance, which capitalizes on integrated logistics chains and public/private partnerships.” (Defense Acquisition University, 2005) “Performance Based Logistics (also commonly referred to as Performance Based Life

The Life Cycle Assessment process comprises four main stages: goal and scope definition, inventory analysis, impact assessment, and interpretation [2,3].

Life Cycle Cost (LCC) is the total lifespan cost incurred by an organization in purchasing, installing, operating, maintaining, and disposing off any equipment used in daily operations of the firm. In regard to this, estimation of LCC encompasses using a particular approach in identifying and quantifying components of an LCC equation (Pehnt, 2006). The use of LCC as an assessment tool when selecting possible design alternatives results in the provision of a cost-effective solution within limits of available data. In addition, a standard LCC comprises initial and operation costs, installation and commissioning costs, energy costs as well as disposal costs among others.

Process costing is a system which mostly practices by a company whereby the manager of the company wants to know the cash flow from one department to another. Process costing give a clarify information to managers, therefore this activities is very important.

Design for logistics is a series of concepts in the field of supply chain management involving product and design approaches that help to control logistics costs and increase customer service levels. The concepts include the three key components, Economic packaging and transportation, Concurrent and parallel processing, and Standardization.