Contemporary Engineering Economics, 6 th edition Park Copyright © 2016 by Pearson Education, Inc. All Rights Reserved Life-Cycle Cost Analysis Lecture No. 21 Chapter 6 Contemporary Engineering Economics Copyright © 2016

Contemporary Engineering Economics, 6 th edition Park Copyright © 2016 by Pearson Education, Inc. All Rights Reserved Why Life-Cycle Cost (LCC) Analysis? Why? To select from among design alternatives that fulfill the same performance requirements, but differ with respect to initial and operating costs To predict the most cost-effective solution Fundamental Principle When comparing different design alternatives, we need to consider both non- recurring as well as recurring costs over the life span of each design alternative.

Contemporary Engineering Economics, 6 th edition Park Copyright © 2016 by Pearson Education, Inc. All Rights Reserved Stages of Life-Cycle Cost

Contemporary Engineering Economics, 6 th edition Park Copyright © 2016 by Pearson Education, Inc. All Rights Reserved Example 6.10: Pumping System with a Problem Valve  Decision Problem: Fixing a pumping system with a faulty valve.  Design options: o Option A: Buy a new control valve. o Option B: Trim the pump impeller to reduce the pressure. o Option C: Install a variable-frequency drive (VFD). o Option D: Repair the valve as needed. Sketch of a Pumping System in Which the Control Valve Fails

Contemporary Engineering Economics, 6 th edition Park Copyright © 2016 by Pearson Education, Inc. All Rights Reserved Engineering Solution Alternatives Option A: A new control valve can be installed to accommodate the high pressure differential. Option B: The pump impeller can be trimmed so that the pump does not develop as much head, resulting in a lower pressure drop across the current valve. Option C: A variable frequency drive (VFD) can be installed, and the flow control valve removed. The VFD can vary the pump speed and thus achieve the desired process flow. Option D: The system can be left as it is, with a yearly repair of the flow control valve to be expected.

Contemporary Engineering Economics, 6 th edition Park Copyright © 2016 by Pearson Education, Inc. All Rights Reserved Life-Cycle Cost Elements

Contemporary Engineering Economics, 6 th edition Park Copyright © 2016 by Pearson Education, Inc. All Rights Reserved Cost Comparison for Options A–D

Contemporary Engineering Economics, 6 th edition Park Copyright © 2016 by Pearson Education, Inc. All Rights Reserved LCC Calculation for Option A

Contemporary Engineering Economics, 6 th edition Park Copyright © 2016 by Pearson Education, Inc. All Rights Reserved Comparison of LCC for Options A–D