What is an example of life cycle cost savings described in the material?

What is an example of life cycle cost savings described in the material?

• A. An increase in upfront cost to improve performance with no change in lifecycle costs.
• B. A reduction of 10% in overall life cycle cost achieved by trading 5% of point to point surface communications range KPP for greater component reliability.
• C. A 20% reduction in life cycle cost achieved by delaying maintenance.
• D. Elimination of all life cycle costs through reliability.

Answer: (B)

Life cycle cost savings come from reducing the total costs incurred over the system’s life, not just the initial price. In this example, a small sacrifice of performance—giving up 5% of a point-to-point communications range KPP—in exchange for greater component reliability leads to a 10% reduction in overall life cycle cost. The reliability gains reduce expensive failures, maintenance, downtime, and part replacements over the system’s life, so the total cost is lower even though performance is slightly reduced upfront. The other scenarios don’t achieve that overall savings. Increasing upfront cost with no change in life cycle costs doesn’t lower total spending. Delaying maintenance might save money in the short term but often raises costs later due to bigger failures or more extensive repairs. Eliminating all life cycle costs is not realistic; some cost from ongoing operation and maintenance will always exist.

Life cycle cost savings come from reducing the total costs incurred over the system’s life, not just the initial price. In this example, a small sacrifice of performance—giving up 5% of a point-to-point communications range KPP—in exchange for greater component reliability leads to a 10% reduction in overall life cycle cost. The reliability gains reduce expensive failures, maintenance, downtime, and part replacements over the system’s life, so the total cost is lower even though performance is slightly reduced upfront.

The other scenarios don’t achieve that overall savings. Increasing upfront cost with no change in life cycle costs doesn’t lower total spending. Delaying maintenance might save money in the short term but often raises costs later due to bigger failures or more extensive repairs. Eliminating all life cycle costs is not realistic; some cost from ongoing operation and maintenance will always exist.