What analysis identifies the lifetime cost of acquiring, installing, maintaining, and repairing a system?

Life-cycle cost analysis is a systematic approach used to assess the total economic worth of a system, product, or project over its entire lifespan. This type of analysis takes into account various costs associated with the acquisition, installation, operation, maintenance, and eventual disposal of the system. By evaluating these comprehensive costs, life-cycle cost analysis helps decision-makers understand the long-term financial impacts and sustainability of an investment.

This method is particularly important in facility management since it encourages planning for long-term expenses rather than just initial outlays, allowing managers to make informed choices that enhance the overall efficiency and effectiveness of their facilities. It underscores the significance of considering both current and future costs, facilitating better budgeting and resource allocation.

In contrast, cost-benefit analysis primarily compares the benefits of an investment against its costs, without necessarily detailing the timeline or lifecycle of expenses. Return on investment analysis focuses on the profitability relative to the costs incurred, and asset management analysis typically refers to the management of physical and financial assets but does not specifically outline the costs associated with the lifespan of a system.