Question

Explain the terms in your own words.

Use a maximum of 80 words per answer.

(1) Life-cycle cost

Answer 1

Life cycle costing is the process of compiling all costs that the owner or producer of an asset will incur over its lifespan. In the engineering and production areas, life cycle costing is used to develop and manufacture goods that will have the least cost to the customer to install, operate, maintain, and dispose of. In the customer service and field service areas, life cycle costing is focused on minimizing the amount of warranty, replacement, and field service work that must be performed on products over their useful lives.