Navigating your way through Life Cycle Cost Analysis (LCCA) can be a tricky road to follow. To successfully use LCCA, understanding everything that goes into it is critical. Everything from calculating costs to differentiating cost factors can affect each job differently. Life cycle cost analysis is increasingly being encouraged as part of the decision-making process for paving projects in the U.S. and around the world.
In a recent article from Pavement Interactive, they write that “One of the best practices for LCCA is to make a comprehensive analysis of costs over the life of the pavement. At the same time, to maximize the usefulness of LCCA, the analysis should take place as early during project development as possible, and it may not be feasible or advisable to drill down to an extreme level of detail. As a result, life cycle cost analysis is primarily a decision support tool, not a formula to dictate a particular result. To understand the costs being analyzed, let’s take a look at the major categories of costs covered in LCCA.