LCC Analyses

About LCC Analyses

LCC Analyses are economic analyses used to evaluate the total cost of ownership of an asset, including cost of installation, operation, maintenance, conversion, and decommission, through applying different operating scenarios to a model.

Managers are able to use analyses to understand the cost of ownership of Assets or fleets of Assets over defined accounting periods or planned asset life. By comparing scenarios, LCC Analyses provide information to inform choices to optimize costs over the period defined in the Analysis. Cost information is presented in a range of categories to help managers determine which assets to buy, what maintenance strategies are most cost effective, and when replacement is necessary. Informed decisions can be based on a range of financial criteria for all scenarios in the analysis, presented in a chart format. Examples include Capital Costs, Operating Costs and Cashflow.

For Example, as a transportation manager, I would like to evaluate the costs of owning a fleet of trucks. Using an LCC Analysis, the company will keep a log of the use and maintenance of each truck in the fleet in order to determine the exact cost of each truck in the fleet and to know when replacement or decommission should occur.

About Fleet Management

Using LCC Analyses, you can now manage a fleet of vehicles in one central location. Analyses are used to collect performance data, balance costs of ownership, and plan action items over the lifespan of each vehicle, and the fleet.

Access an LCC Analysis

Before You Begin

Procedure

  1. Access the LCC Overview page.
  2. Select the LCC Analyses tab.

    The LCC Analyses section appears, displaying a list of available LCC Analyses.

  3. In the list, in the Analysis Name column, select an analysis.

    In a new page, the Analysis Summary workspace for the selected analysis appears, displaying the Summary section. The following charts related to LCC Analyses can be accessed from the drop-down list box:

    • Capital Cost: Displays a summary trend for each scenario, which is based on the sum of all capital costs per period for each scenario.
    • Operating Cost: Displays a summary trend for each scenario, which is based on the sum of all operating costs per period for each scenario.
    • Cash Flow Trend: Displays a summary trend for each scenario, which is based on the cash flow per period for each scenario.
    • Capital Cost Break Down: Displays stacked bars for each scenario, which breaks down the capital costs for the capital cost type.
    • Operating Cost Break Down: Displays stacked bars for each scenario, which breakdown the operating costs by elements.
    • Depreciated Values: Displays a summary trend of depreciated values per period for each scenario.
    • Present Values: Displays a summary trend of present values per period for each scenario.
    • Total Cost: Displays a cumulative summary trend of the associated capital costs and operating costs for each scenario.

About Analysis Charts and Graphs

Capital Cost Chart

The Capital Cost Summary Chart displays the trend for each scenario, as well as the sum of all capital costs per period for each scenario.

Capital Cost Break Down Chart

The Capital Cost Break Down Chart displays all the values that comprise the capital cost totals for each scenario in the analysis. Within the chart, you will see a complete breakdown of the costs contained in a scenario. If you hover over the individual capital costs, the title and details of the costs appear.

Cash Flow Chart

The Cash Flow Chart displays Cash Flow per period. All of the values from the Cost Data grid are factored into the output shown in the chart, making it easier for you to monitor the movement of money throughout the span of the Analysis and easily view and determine which scenario has the optimal cash flow as compared with other scenarios.

Depreciated Value Chart

The Depreciated Value Chart displays Depreciated Values per period for each scenario, detailing how the value of the asset has been depreciated throughout the analysis. The chart allows you to assess the overall depreciation so that a corrective course of action can be determined.

Equivalent Unit Cost Chart

The Equivalent Unit Cost Chart displays the average cost per operating unit as it has changed across the analysis lifespan.

Operating Cost Chart

The Operating Cost Chart displays the trend, as well as the sum of all operating costs per period for each scenario. The chart allows you to review the overall operating costs of an Analysis and make decisions regarding future courses of action.

Operating Cost Break Down Chart

The Operating Cost Break Down Chart displays stacked bars for each scenario that are broken down by element; these break down the operating costs by elements. The Break Down chart enables you to see where money is being spent within each scenario, identifying major cost drivers and target areas for cost reduction. If you hover over the individual operating costs, the title and details of the costs appear.

Present Value Chart

The Present Value Chart displays Present Values per period for each scenario. Present values are determined based on the Interest Rate.

The chart provides information to allow you to accurately view the expected worth of your Analysis based on the current Interest Rate.

Remaining Planned Life

The Remaining Planned Life graph displays the amount of life that remains after consumption throughout a scenario, or all scenarios, in an analysis.

Total Cost Chart

The Total Cost Chart displays the cumulative summary trend of the associated capital costs and operating costs for each scenario. The chart allows you to review the overall capital costs and operating costs of an Analysis and make decisions regarding future courses of action.



Create an LCC Analysis

Procedure

  1. Access the LCC Overview page.
  2. In the upper-right corner of the page, select New Analysis, and then select one of the following options:
    OptionDescription
    Basic AnalysisSelect this option if you want to create a standard Life Cycle Cost Analysis.
    Fleet ManagementSelect this option if you want to create an analysis to manage a fleet. This option provides a profile for each secondary element, start and end lives, additional calculated values for EUC and Remaining Life, and additional charts.
    In a new page, the Analysis Summary workspace for the new analysis appears, displaying the Definition section.
  3. As needed, enter values in the available fields, and then select .

    The LCC Analysis is saved.

Modify an LCC Analysis

Procedure

  1. Access the LCC Analysis that you want to modify.
  2. Select the Definition tab.
    The Definition section appears.
  3. Select .
  4. As needed, modify the values in the available fields.
    Note: When modifying the value in the Analysis Period Unit box and Analysis length, the following occurs:
    • When the Number of Periods field is modified to shorten the Analysis, columns are removed from the end of the Cost Data grid.
    • When the Number of Periods field is modified to lengthen the Analysis, empty columns are added to the end of the Cost Data grid.
    • When only the Start Date field is modified, the columns in the Cost Data grid will remain the same and only the dates in the Definition and Summary section will reflect the change.
    • When you modify the value in the Analysis Period Unit box, the data in the Cost Data grid is divided or aggregated based on the new unit of time that you specify. For example, if a unit was previously measured in years and is now measured in quarters, then the data in each row will be one fourth of what it was previously. For the Salvage Value row, the whole value will appear in the last quarter within the same year.
  5. Select .
    The analysis is saved.

Delete an LCC Analysis

Procedure

  1. Access the LCC Overview page.
  2. In the workspace heading, select the LCC Analyses tab.
    The LCC Analysis section appears, displaying a list of available LCC Analyses.
  3. Select the row for the analysis that you want to delete.
  4. At the top of the workspace, select .
    A confirmation message appears.
  5. Select Yes.
    The LCC Analysis is deleted from the APM database.

Access Reference Documents in LCC

Procedure

  1. Access the LCC Analysis whose Reference Documents you want to access.
  2. In the workspace, select the Reference Documents tab.
    A list of Reference Documents linked to the selected LCC Analysis appears.

Access the LCC Team Members Section

Procedure

  1. Access the LCC Analysis whose list of team members you want to access.
  2. In the workspace, select the Team Members tab.
    The Team Members section appears, displaying a list of team members assigned to the analysis.
    Tip: For details about working with teams and the Team Members section, refer to the Teams section of the documentation.

Access Recommendations in LCC

Procedure

  1. Access the LCC Analysis whose list of team members you want to access.
  2. Select the LCC Analyses tab.
    The LCC Analyses section appears, displaying a list of available LCC Analyses.
  3. Select the analysis for which you want to access Recommendations.
    The Analysis Summary workspace for the selected analysis appears, displaying the Summary section.
  4. Select .
    The Recommended Actions pane expands.
    Tip: For information about additional options available when working with recommendation records, refer to the Recommended Actions section of the documentation.