Life Cycle Costing Workshop
Live 2-day workshop designed to give students the knowledge and hands-on skills they need to apply LCC principles in their own workplace. This course is also available in a 4-hour condensed version.
Agenda:
Day 1 - Theory
Session
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Description
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Principles |
Examines the structure of classic life cycle cost models and applies it to mobile equipment. Key inputs include capital cost, operating cost, maintenance and disposal. A simple example is developed using these principles and the class is provided a number of industry standard tables for fuel consumption, tire life and component change intervals for representative models of mobile equipment |
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Risk |
Economic, application and commercial risk factors are discussed in depth, along with the variable nature of these elements. A risk assessment, reflecting issues such as road condition, loading, maintenance strategy and operator training is created and quantified in the simple LCC model and tested for sensitivity. Production and machine availability are then introduced into the model, adjusted for risk, and tested for sensitivity. |
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Investment Analysis |
The LCC model is applied to support common investment analysis techniques including: · Gross cost · Cost per ton (CPT) · Net present cost (NPC) · Net present cost per ton (DCPT) · Break-even analysis |
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Practical LCC Models |
Discussion of how LCC models are applied in the field, Discussion of how LCC models are applied in the field, and to what detail. Topics include how standard jobs are incorporated into LCC models, and how LCC supports budgets, resource forecasting, work management and equipment optimization. |
Day 2 – Practice
Session
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Description
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Exercise |
Class is provided data to construct its own LCC models in teams. Models should reflect a base case and two operating scenarios. Each team is asked to present its analysis, including their risk assessment, to the class. |
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Detailed Application |
Class is provided a spreadsheet file that represents a fleet of equipment at a detail level. Together the group uses the data to develop: · Department budget · CPT estimates for the life of the fleet · Major component schedules · Estimates for labour and shop resource requirements · Availability calculations for life of fleet · Identify high cost components · Calculates residual value in components for any point in time |