Lecture10_Nov21_2005

Lecture10_Nov21_2005 - EMP5100 - Introduction to...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
EMP5100 - Introduction to Engineering Management Lecture 10 9. Product costing (cont.) Life Cycle Costing (LLC) Concept developed in 1965 by the US DoD. Under the present economic item procurement has taken on a different thread. A system which has been fielded must be supported for the total life. Definition : The life cycle cost of a product is the sum of all costs to the government of procurement and ownership of that product over its life span. LLC Model I LLC = α + β Where α = Σ i=1 9 (NC i ) α – equipment non-recurring cost NC i – is the i -th non-recurring cost : [1] training [2] support [3] transportation [4] acquisition [5] test equipment [6] installation [8] LLC management and β = Σ i=1 5 (C i ) β – equipment recurring cost C i – is the recurring cost: [1] inventory EMP5100 1 November 21, 2005 1 0.75 0.5 0.25 Labor cost Cost of spares Reliability Cost LCC Acquisition Cost Ownership Cost = Labor + Spares
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
EMP5100 - Introduction to Engineering Management Lecture 10 [2] manpower [3] maintenance [4] operating [5] support LLC Model 2 LLC = Σ i=1 4 (C i ) Where: C2 – production and construction C3 – operation and support C4 – Retirement and disposal Canadian Services Cost Model
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 01/09/2012 for the course EMP 5100 taught by Professor Dhillon during the Winter '11 term at University of Ottawa.

Page1 / 5

Lecture10_Nov21_2005 - EMP5100 - Introduction to...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online