Chapter 8 - Cost Considerations

Abstract

Maintainability is an important factor in the total cost of equipment. An increase in maintainability can lead to the reduction in operation and the support costs. For example, a more maintainable product lowers the maintenance time and the operating costs. Competition is a prime factor in the current trend toward ensuring that equipment is cost effective to support its entire life span. In many cases, the cost of acquiring a product is less than the cost of ownership over the product's life cycle. The hidden costs associated with equipment operation and support can account for 75% of the total life cycle cost. In some cases, support costs may, in the end, even total 10 to 100 times the original procurement cost. The cost of ownership includes the operation costs, the maintenance costs, the cost of test and support equipment, the retirement and disposal costs, the technical data costs, the cost of training operations and maintenance personnel, and the cost of spares, inventory, and other support materials. Reducing the cost of ownership is critical if equipment is to be cost effective. The opportunity for creating savings in a product's life cycle cost decreases dramatically in the progress from the concept design and advance planning phase to the production and construction phase. In fact, 60% to 70% of the projected life cycle cost can sometimes be locked in by the completion of the preliminary design phase. This means the greatest impact on costs comes from the decisions made during the early design phases.