Abstract
A physical asset’s health is the consequence of a series of factors, ranging from the characteristics of the location where it operates to the care it is submitted to. These characteristics can influence the durability or the horizon of the useful life of any equipment, as well as determine its operational performance and its failure rates in the future. Therefore, the assessment of the influence of asset health on Life Cycle Costs is a compelling need. This paper proposes the incorporation of a factor that reflects the projected behavior of an asset’s health index into its corresponding Life Cycle Costing (LCC) model. This allows cost estimates to be made more realistic and LCC models to be operated more accurately. As a way of validating this proposal, a case study is shown. The methodology proposed in this case study was applied in a real case, considering an LNG facility located in central Chile. In addition, sensitivity studies and comparisons with the results obtained by a traditional Life Cycle Costing model are included. The results show the usefulness of incorporating asset health aspects into the Life Cycle Costing of physical assets.
Highlights
The concept of value has been extensively underlined in the Asset Management literature in recent years
The results show the usefulness of incorporating asset health aspects into the Life Cycle Costing of physical assets
The Economic Engineering methodology known as Life Cycle Costing (LCC), is used especially as a framework to determine the impact of a number of decisions and processes of a physical asset over its useful life [3,4,5]
Summary
The concept of value has been extensively underlined in the Asset Management literature in recent years. The reliability analysis process seeks to represent mathematically the occurrences of failure events using different probabilistic distribution models, such as exponential distribution, generally applied to electrical systems, or Weibull distribution, generally applied to rotating machines and wear processes When such distributions are obtained, and when they are incorporated into the Life Cycle Cost estimation models, relevant information on the health of the assets is not available. This paper proposes a methodology for calculating Life Cycle Cost Analysis that incorporates aspects of reliability and the health of physical assets This methodology is intended to be a tool that allows for a more precise quantification of the amount of degradation of an asset over time and the influence that this causes on the failure mechanisms.
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