Life Cycle Costing

Life cycle costing is an economic term that has plenty of applications. It indicates the total cost of a product or item. The life cycle costing covers pending and future expenses. It can help you figure out whether or not it’s worth having such a product, commodity, asset, anything that involves a business.

How to figure out life cycle costing?

It takes plenty of analysis to calculate life cycle costing. The cost of purchasing is also included in the life cycle costing, depending on the industry and the scale of the asset. For example, if you’re calculating the life cycle costing of a commodity, the payment for obtaining it also must be included.

Additionally, anything that would require spending to change the asset in order to make it functional or continue staying the same as it is also included in life cycle costing. It’s overall an easy measurement to see if something is worth it or not in your business.