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Life Cycle Cost

Who charges? Typically evaluated by manufacturers, suppliers, or service providers.

Charged throughout the life cycle of a product or service.

Life cycle cost is the overall cost incurred across a product’s or service’s whole existence, including acquisition, operation, maintenance, and disposal expenses. It includes all expenses incurred while owning, operating, and finally decommissioning or replacing the product or service.

Tip: When calculating life cycle costs, consider not just the initial purchase price, but also long-term running costs, maintenance charges, and potential resale or salvage value. Consider environmental and social expenses, as well as any regulatory compliance requirements, which may affect the total cost during the life cycle.