THE PRINCIPLES OF LIFE CYCLE COSTING OF THE ASSETS OF THE DEFENCE FORCES Cover Image

THE PRINCIPLES OF LIFE CYCLE COSTING OF THE ASSETS OF THE DEFENCE FORCES
THE PRINCIPLES OF LIFE CYCLE COSTING OF THE ASSETS OF THE DEFENCE FORCES

Author(s): Marek Mardo
Subject(s): National Economy, Economic policy, Military policy, Socio-Economic Research, Peace and Conflict Studies
Published by: Kaitseväe Akadeemia (KVA)
Keywords: life cycle costing; life cycle cost estimation; cost breakdown structure (CBS); cost element; product tree; resources; cost of ownership (COO); total ownership cost (TOC); indirect cost; variable cost

Summary/Abstract: Life cycle cost estimation enables decision-makers to have an overview of all costs related to a procured asset item during its service life and helps to make an optimal decision based on the total cost of a tender. Usually, armament or a weapon system is purchased with the lowest possible price. Ignorance in calculating the expenses that accompany the use of a purchased item will result in a situation where there are no budget resources left for maintenance. Without regular maintenance and updating, however, a purchased item will become unserviceable. This article1 gives a short overview of the historic development of life cycle costing, describes the life cycle stages of an item, and introduces a method for analysing the costs related to owning an item.

  • Issue Year: 2022
  • Issue No: 19
  • Page Range: 52-77
  • Page Count: 26
  • Language: English
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