Life-cycle costing

Life-cycle costing is a decision-making technique which takes into account both initial and future costs. For buildings and structures this usually means considering not just capital costs but relevant costs in use (operational costs) such as maintenance, component replacement, utilities, managing the asset for a given period, and end-of-life costs.

Many designers and clients apply life-cycle costing intuitively when making choices, along the lines of: Solid timber flooring strips may have a higher capital cost than a laminate floor alternative. But taking into account increased risk of damage and earlier replacement of a laminate floor, paying more now for a solid timber floor may result in less cost and disruption in the long term.

Life-cycle costing methods formalise and attempt to quantify this approach. Life-cycle costing can also be used as part of a value engineering approach, indeed, for short life applications, less costly and less durable component options may offer better value.

This Wood Information Sheet was updated in March 2019 following the revision of two British Standards relating to service life planning.

Many designers and clients apply life-cycle costing intuitively when making choices, along the lines of: Solid timber flooring strips may have a higher capital cost than a laminate floor alternative. But taking into account increased risk of damage and earlier replacement of a laminate floor, paying more now for a solid timber floor may result in less cost and disruption in the long term.

Life-cycle costing methods formalise and attempt to quantify this approach. Life-cycle costing can also be used as part of a value engineering approach, indeed, for short life applications, less costly and less durable component options may offer better value.

Contents:

• Life-cycle costing and whole-life costing
• Calculating life-cycle costs
• Life-cycle cost models
• Life-cycle cost outcomes: timber components
• Life-cycle costs for complete buildings