The Relationship Between Life-Cycle Costing and Performance: An Exploratory Analysis

Abstract

This thesis presents a pilot study conducted to determine the effects of life-cycle costing on completed system properties (performance, cost and time). Life-cycle costing is a costing technique used to determine the long term costs of a system, from the initial research and development through product disposal. Cost categories such as operations, maintenance and repair are included in life-cycle costing estimates. A literature review of life-cycle costing revealed that little research has been done on the long term effects of life-cycle costing, specifically from the point of view of experts in the field who use it in their systems. Therefore, this was the topic of the exploratory research done in this study and the basis for the research model. The pilot study consisted of developing a survey instrument, testing it on a sample population, and analyzing the results to determine how accurately the survey questions answered the research question. The results of the pilot study indicated that there is a large degree of inconsistency in the perceived successes of life-cycle costing amongst experts in the field. Suggestions for additional areas to be explored in future research models are suggested in the conclusion of this pilot study.