Life cycle costing: a review of published case studies

Life cycle costing: a review of published case studies Purpose – Despite existing life cycle costing (LCC) method descriptions and practicable suggestions for conducting LCC analyses, no systematic analyses on actual implementations of LCC methods exist. This paper aims to review reports on LCC applications to provide an overview of LCC uses and implementation feasibility. Design/methodology/approach – A review of LCC cases reported in academic and practitioner literature. Case reports were compared against one another and against the defining articles in the field. Findings – Most of the reported LCC applications were far from ideal. Compared to the methods suggested in the literature many of the case study applications: covered fewer parts of the whole life cycle, estimated the costs on a lower level of detail, used cost estimation methods based on expert opinion rather than statistical methods, and were content with deterministic estimates of life cycle costs instead of using sensitivity analyses. Research limitations/implications – This review is limited to reported LCC applications only. Further research is encouraged in the form of a field‐based multiple‐case study to reveal context‐specific dimensions of LCC analysis and implementation challenges in more detail. Practical implications – This review highlights the difficulty of conducting a reliable LCC analysis, and points out typical problems that should be carefully considered before drawing conclusions from the LCC analysis. Originality/value – First systematic analysis of LCC applications that gives directions for further research on the LCC concept. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Managerial Auditing Journal Emerald Publishing

Life cycle costing: a review of published case studies

Managerial Auditing Journal, Volume 23 (3): 22 – Mar 21, 2008

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Publisher
Emerald Publishing
Copyright
Copyright © 2008 Emerald Group Publishing Limited. All rights reserved.
ISSN
0268-6902
DOI
10.1108/02686900810857703
Publisher site
See Article on Publisher Site

Abstract

Purpose – Despite existing life cycle costing (LCC) method descriptions and practicable suggestions for conducting LCC analyses, no systematic analyses on actual implementations of LCC methods exist. This paper aims to review reports on LCC applications to provide an overview of LCC uses and implementation feasibility. Design/methodology/approach – A review of LCC cases reported in academic and practitioner literature. Case reports were compared against one another and against the defining articles in the field. Findings – Most of the reported LCC applications were far from ideal. Compared to the methods suggested in the literature many of the case study applications: covered fewer parts of the whole life cycle, estimated the costs on a lower level of detail, used cost estimation methods based on expert opinion rather than statistical methods, and were content with deterministic estimates of life cycle costs instead of using sensitivity analyses. Research limitations/implications – This review is limited to reported LCC applications only. Further research is encouraged in the form of a field‐based multiple‐case study to reveal context‐specific dimensions of LCC analysis and implementation challenges in more detail. Practical implications – This review highlights the difficulty of conducting a reliable LCC analysis, and points out typical problems that should be carefully considered before drawing conclusions from the LCC analysis. Originality/value – First systematic analysis of LCC applications that gives directions for further research on the LCC concept.

Journal

Managerial Auditing JournalEmerald Publishing

Published: Mar 21, 2008

Keywords: Life cycle costs; Product life cycle; Case studies

References

  • Supplier selection problem: a comparison of the total cost of ownership and analytic hierarchy process approaches
    Bhutta, K.S.; Huq, F.
  • Product life cycle cost analysis: the impact of customer profiling, competitive advantage, and quality of IS information
    Dunk, A.S.
  • Total cost of ownership: an analysis approach for purchasing
    Ellram, L.M.

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