Life Cycle Costing

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Conflict of Interest : 1. Project Engineering wants to minimize capital costs as the only criteria, 2. Maintenance Engineering wants to minimize repair hours as the only criteria, 3. Production wants to maximize uptime hours as the only criteria, 4. Reliability Engineering wants to avoid failures as the only criteria, 5. Accounting wants to maximize project net present value as the only criteria, and 6. Shareholders want to increase stockholder wealth as the only criteria.

LCC can be used as a management decision tool for harmonizing the never ending conflicts by focusing on facts, money, and time.

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Life Cycle Costing is a process to determine the sum of all the costs associated with an asset or part thereof, including acquisition, installation, operation, maintenance, refurbishment and disposal costs. The total cost throughout its life including planning, design, acquisition and support costs and any other costs directly attributable to owning or using the asset

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Metode untuk mengevaluasi alternatif investasi proyek bangunan berdasarkan biaya inisial, biaya operasional, dan biaya pemeliharaan selama umur ekonomis bangunan

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The total costs of owning the building over its predicted life span including initial capital cost, occupation costs, operating costs, and the cost incurred or benefit derived from the disposal of the asset at the end of its life A technique to ascertain a suitable balance between capital cost on initial provision and costs incurred as a consequence of use

to estimate the overall costs of project alternatives and to select the design that ensures the facility will provide the lowest overall cost of ownership consistent with its quality and function

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Biaya siklus-hidup (life-cycle costing) adalah proses yang logis dan sistematis untuk menyusun total biaya aset mulai dari konsepsi sampai dengan Penghapusannya. Life-cycle costing harus mencakup penilaian terhadap biaya-biaya dari: - Perencanaan; - Pengadaan; - Operasi dan pemeliharaan; dan - Penghapusan.

“SUSTAINING ASSETS”

Planning

Acquisition

• Identifikasi kebutuhan • Review pilihan • Cost/benefit

• Non assets alternatives • Evaluasi resiko • Core –aset milik • Aset sewa • Kerjasama

Monitoring and Performance management

SUSTAINABLE DEVELOPMENT

• Continous monitoring • Pengukuran • Pencapaian hasil

• Habis ekonomis • Replacement • Renewel • Redeployment

Disposal

• Optimalisasi kinerja • Program maintenance • Penilaian aset • Kondisi dan penggunaan

Operation & Maintenace

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Biaya Perencanaan : Biaya yang terkait dengan penyusunan solusi aset sampai pada tahap aset siap deiperoleh/diadakan ◦ Studi ilmiah ◦ Lamporan dampak lingkungan ◦ Studi kelayakan

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Biaya Pengadaan : Terkait dengan pengadaan awal aset ◦ Biaya bangunan/konstruksi ◦ Biaya komisi ◦ Biaya pengangkutan dan pemasangan/instalasi

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Biaya Operasi dan Pemeliharaan : Pengeluaran atas operasi seharihari dari suatu peralatan/aset. ◦ ◦ ◦ ◦

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Biaya energi Pembersihan Pemeliharaan Operator

Biaya Penghapusan : Mencakup kerugian finansial atas penghapusan aset sebelum berakhirnya umur manfaat yang diharapkan

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the assessment and comparison of options/alternatives during the design/ acquisition phase 

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Considers all cost components within asset options over the asset’s life Does not directly consider benefits or revenue streams that are generally assumed to be equal amongst the options being compared (benefits and revenues are considered in the evaluation of options).

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The purpose of an LCCA is to estimate the overall costs of project alternatives and to select the design that ensures the facility will provide the lowest overall cost of ownership consistent with its quality and function.

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The required data categories for a life cycle cost analysis PHYSICAL DATA Superficial floor area Types of Boilers/Heating System Windows area Functional area Number of Occupants Walls & Ceilings Number of Sanitary Fittings

OCCUPANCY DATA Occupancy Profile Functionality Hours of Life Particular Features

COST DATA Acquisition Cost Capital Cost Taxes Inflation Discount Rate Management Cost Replacement Cost Maintenance Cost Operating Cost Cleaning Cost Demolition Cost Insurance

TYPES OF LIFE CYCLE DATA

QUALITY DATA Condition of : -Sanitary Fittings -Pipework -Furnishing -Boiler -Decoration -Fabric -Road Surfing

PERFORMANCE DATA Maintenance Cycles Cleaning Cycles Thermal Conductivitiy Occupancy Time Electricity Gas

Formula Dasar :

LCC = Initial Cost + Future Cost – Salvage value LCC Calculation (for Building) :

LCC = I + Repl + E + W + OM&R + O - Res       

I = PV investment costs (if incurred at base date, they need not be discounted) Repl = PV capital replacement costs E = PV of energy costs W = PV of water costs OM&R = PV of non-fuel operating, maintenance and repair costs O = PV of other costs Res = PV residual value (resale value, salvage value) less disposal costs

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Initial Costs—Purchase, Acquisition, Construction Costs Fuel Costs Operation, Maintenance, and Repair Costs Replacement Costs Residual Values—Resale or Salvage Values or Disposal Costs Finance Charges—Loan Interest Payments, Tax Non-Monetary Benefits or Costs

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Initial costs may include capital investment costs for land

acquisition, construction, or renovation and for the equipment needed to operate a facility Energy and Water Costs Replacement Costs : depend on the estimated life of the system and the length of the study period Residual Values : is its remaining value at the end of the study period, or at the time it is replaced during the study period. Residual values can be based on value in place, resale value, salvage value, or scrap value, net of any selling, conversion, or disposal costs

component performance (detail design,

workmanship, building use, client attitude to maintenance, exposure, weather climate and so on that effect to the building condition) building life (the assumption on the economic life span of the building)

inflation technological change and fashion taxation

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Alternatif A : ◦ Capital Cost $ 100.000 ◦ Predicted annual maintenance $ 2000

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Cash Flow 100.000 2.000 (x 60 years)

Alternatif B : ◦ Capital Cost $ 120.000 ◦ Predicted annual maintenance $ 500

ALTERNATIF A Year (s) Discount Factor 1 1 - 60

1 11,48

220.000

Result (after 60 years operation) :  Total Outlay of A $ 220.000  Total Outlay of B $ 150.000

Cash Flow 120.000 500

Present Value 100.000 22.096

122.096 ALTERNATIF B Year (s) Discount Factor 1 1 - 60

1 11,48

Present Value 120.000 5.524

(x 60 years)

Is that so simple ?

150.000

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125.524

1. Payback Method The length of time taken for the returns from an investment to equal the intial outlay. Where the proceeds are the same each year the payback period is obtained by dividing the initial outlay by the annual proceeds

1 x x 0 (1  i )

YPatau ( P / A, i, n)  

If roof insulation will cost $100 and the annual saving on fuel is estimated as $20 the payback period is 5 years. This can be compared with the payback periods for other type of insulation; e.g. cavity-wall filling or double glazing to determine which type offers the best value

1 1 (1  i) n YPatau ( P / A, i, n)  i

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Metode ini mengukur seberapa cepat investasi bisa kembali. Bila periode payback ini lebih pendek daripada yang diisyaratkan, maka proyek dikatakan menguntungkan, sedang kalau lebih lama maka proyek ditolak. Metode ini mengukur seberapa cepat suatu investasi bisa kembali, maka dasar yang dipergunakan adalah aliran kas, bukan lab. Untuk itu kita hitung aliran kas proyek tersebut. Problem utama dari metode ini adalah sulitnya menentukan payback maksimum. Dalam prakteknya yang dipergunakan adalah payback umumnya dari perusahaanperusahaan sejenis. Kelemahan metode payback 1.Diabaikan nilai waktu uang 2.Diabaikan aliran kas setelah periode payback Payback period (PBP) adalah jangka waktu tertentu yang menunjukkan terjadinya arus permintaan (Cash in Flow) secara kumulatif sama dengan jumlah investasi dalam bentuk Present Value 25/05/2011

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Also known the present worth method and involves discounting all future cash flows to a common base year. The formulas given earlier in this chapter for PV of $1 and PV of $1 per annum may be used for this purpose although it is probably easier to look up the factors in the standard tables. It should be noted that the analysis is particulary sensitive to the rate of interest used and, therefore, this must be choosen with care. For e.g. the total PV of repainting a building every 5 years over an anticipated life of 39 years (last repainting in year 25) will vary as follows for different rate of interest. For the purpose of this example the repainting cost has been estimated to be $200 and no allowance made for inflation.

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NPV adalah kriteria invetasi yang banyak digunakan dalam mengukur apakah suatu proyek feasible atau tidak. Perhitungan NPV merupakan net benefit yang telah didiscount dengan menggunakan social opportunity cost of Capital (SOCC) sebagai Discount Factor. Secara singkat Formula untuk Net Present Value adalah sebagai berikut :

n

NPV   NBi (1  i) n

NPV   l 1

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n

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l 1

l 1

= Net Benefit = Benefit – Cost = Biaya Invetasi + Biaya Operasi = Benefit yang telah didiscount = discount factor = Tahun (waktu) 26

Lowest LCC (for determining costeffectiveness) NS > 0 (for determining cost-effectiveness) SIR > 1 (for ranking projects) AIRR > discount rate (for ranking projects) SPB, DPB < than study period (for screening projects)

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NS = Net Savings: operational savings less difference in capital investment costs SIR = Savings-to-Investment Ratio: ratio of operational savings to difference in capital investment costs AIRR = Adjusted Internal Rate of Return: annual yield from an alternative over the study period, taking into account reinvestment of interim returns at the discount rate SPB = Simple Payback: time required for the cumulative savings from an alternative to recover its initial investment cost and other accrued costs, without taking into account the time value of money DPB = Discounted Payback: time required for the cumulative savings from an alternative to recover its initial investment cost and other accrued costs, taking into account the time value of money 25/05/2011

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NBi (1  i) n

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Apabila hasil perhitungan Net Present Value lebih besar dari nol dikatakan usaha/proyek tersebut feasible (go) untuk dilaksanakan. Hasil perhitungan Net Present Value sama dengan nol ini berarti proyek tersebut berada dalam keadaan Break Even Point (BEP) dimana TR = TC dalam bentuk Present Value

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atau

NPV   Bi  Ci   NBi

Dimana NB C B I n 25/05/2011

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l 1

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Sebuah mesin yang telah beroperasi selama 3 tahun dengan teknologi lama dan mempunyai biaya operasional lebih tinggi dibandingkan mesin baru.  Alternatif A : Memperbaiki mesin lama dengan biaya $ 100.000 dan biaya operasional $ 2.000 pertahun. Mesin ini masih bisa beroperasi 6 tahun lagi.  Alternatif B : Membeli mesin baru seharga $ 150.000 dengan biaya operasional $ 500 pertahun. Mesin baru ini memiliki usia ekonomis selama 10 tahun. 

ALTERNATIF MANA YANG DIPILIH ???

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ALTERNATIF A

TAHUN 0 1 2 3 4 5 6 7 8 9 10 TOTAL

Net Cost 100.000 2.000 2.000 2.000 2.000 2.000 2.000

Discounting Factor @9% 1,0000 0,9174 0,8417 0,7722 0,7084 0,6499 0,5963

112.000

4,4859

ALTERNATIF B Presentday Cost 100.000 1.835 1.683 1.544 1.417 1.300 1.193

108.972

TAHUN 0 1 2 3 4 5 6 7 8 9 10 TOTAL

Net Cost 150.000 500 500 500 500 500 500 500 500 500 500 155.000

Discounting Factor @9% 1,0000 0,9174 0,8417 0,7722 0,7084 0,6499 0,5963 0,5470 0,5019 0,4604 0,4224 6,4177

Metode Equivalent Annual Cost

Metode Equivalent Annual Cost

Proposal A Equivalent Annual Cost =Net Present Value Present value of $1 per annum = 108.972 4,485919 = 24.292

Proposal A Equivalent Annual Cost = = =

Presentday Cost 150.000 459 421 386 354 325 298 274 251 230 211 153.209

Kesimpulan : • Alternatif A : Pengeluaran $ 24.292 pertahun selama 6 tahun memiliki nilai kini sebesar $ 108.972 • Alternatif B : Pengeluaran $ 23.873 pertahun selama 10 tahun memiliki nilai kini sebesar $ 153.209

Net Present Value Present value of $1 per annum 153.209 6,417658 23.873

TERIMA KASIH

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