ENGINEERING ECONOMICS AND LIFE CYCLE COST ANALYSIS

Abstract

Life-cycle cost analysis (LCCA) is anevaluating tool to valuate the total financial/resource requirements for total ownership of a building. LCCA is effective when project options that fulfill the same task demands, having different initial costs and operational costs, needs to be examined in order to undertake the option that optimizes financial requirements. Building-related expenses can be furthercategorized into the following:  Initial Costs  Operation, Maintenance, and Repair Costs  Replacement Costs  Residual Values  Finance Charges  Non-Monetary Costs This article mainly focuses on the Maintenance and Repair cost analysis; giving probable trends for next 25 years for various elements using DSR, WPI and CPI. These trends are only applicable for the whole of Mumbai. Keyordsw: Life Cycle Cost, Maintenance and Repair cost. --------------------------------------------------------------------***---------------------------------------------------------------------1. LIFE CYCLE COST ANALYSIS .Life Cycle Cost Analysis is a method of estimating the economic performance of a building over its life period. It is also known as “whole cost accounting” or “total cost of ownership,” LCCA balances the intial stage investment with life period costs including owning cost and operating cost of that particular building. LCCA is calculated on the premises that different building design alternatives can accomplish the same functions with the same amount of efficiency. These options having different initial costs, operational costs, maintenance and repair costs and may also differ in life cycle periods. Considering a particular alternative, LCCA forecasts the total cost of building, including initial construction cost, operation and maintenance cost, for a particular life of the building, cited as “study period”. Life cycle cost analysis helps in maintaining a balance between the initial cost of any alternative process adopted and long term cost saving of that alternative process. LCCA also helps in narrowing the most cost effective alternative and also calculates the “payback” period of the increased cost. To estimate life cycle cost for allapplicable alternatives is not feasible, and therefore the guiding principle for LCCA considers the one which affects the long-term expenses. 1.1Importance of LCCA [1].As the CHART-1 below depicts 30 year cost analysis of a building’s life, including its construction costs, its maintenance costs, operation costs, and utility costs. CHART–1:30-YEAR ANALYSIS Since it is evident that for a 30-year period, maintenance cost accounts nearly 6% of the total cost, the Maintenance and Repair cost analysis will be the prime focus of this article. 2. MAINTENANCE AND REPAIR Building repairs and maintenance mainly consists ofconserving proper state of a building, its functions and utilities in routine use. The types of building repair and maintenance are:  Day to day repairs service facilities  Annual repairs  Special repairs  Additions and alterations  Preventive maintenance 28 % 6 % 4 % 4 % 58 % 30-YEARS LIFE CYCLE COST (%) UTILITIES MAINTENANCE SERVICES SYSTEM REPLACEMENT IJRET: International Journal of Research in Engineering and Technology eISSN: 2319-1163 | pISSN: 2321-7308 _______________________________________________________________________________________ Volume: 05 Issue: 03 | Mar-2016, Available @ http://www.ijret.org 391 3. RESEARCH METHODOLOGY The maintenance and repair costs are found for various elements that are subjected to maintenance and repairs. The cost of these elements are gathered from the DISTRICT SCHEDULE OF RATES OF MUMBAI AND SUBURBAN AREA over the last 15 years ie. from year 2001. SinceDISTRICT SCHEDULE OF RATES OF MUMBAI AND SUBURBAN AREA is used, these trnds are only applicable to Mumbai district. These rates are consideredas the basis for the projected cost over the next 25 years ie. till year 2040. Basic rates for cistern fittings and labour wages have been collected from the WHOLESALE PRICE INDEX and CONSUMER PRICE INDEX respectively corresponding forecast is developed. Forecasts are developed with the help of trendlines characterized by specific curve equations thereby giving projected rates. 4. ELEMENTS CONSIDERED FOR MAINTENANCE Next 25 years of cost projections for following maintenance elements have been determined:1. INTERNAL PLASTERING 2. EXTERNAL PLASTERING 3. INTERNAL OIL PAINTING 4. CISTERN FITTINGS 5. DEDO TILING 6. FLOORING The main reason behind selecting these elements lies in the fact that these maintenance and repair parameters are the most common and most widely subjected in reference to maintenance and repair works. 4.1 Internal Plastering DESCRIPTION: The analysis considers internal plastering being undertaken in single coat, having 12 mm thickness. The plaster is prepared in cement to water ratio 1:5. Cost of neeru finish has been neglected in this analysis. The cost of scaffolding required and curing provided has been considered. Chart 2: Cost Projections For Internal Plastering Table 1: Cost Projections For Internal Plastering YEARS PROJECTED COST(Rs/Sqm) YEARS PROJECTED COST(Rs/Sqm) 2016 263.5237 2029 1030.573 2017 292.6699 203