Required characteristics of statistical distribution models for life cycle cost estimation

R. Jiang, W. J. Zhang, Ping Ji

Research output: Journal article publicationJournal articleAcademic researchpeer-review

14 Citations (Scopus)

Abstract

Life cycle cost (LCC) is used as the decision objective in many engineering problems such as project selection and bidding. An important nature of LCC estimation is uncertainty. Therefore, cost elements and system cost are usually represented by statistical distributions. A number of statistical models have been used for modeling LCC in the literature. It appears to be lack of sufficient attention to their appropriateness. This paper classifies the models into two categories: one for modeling cost elements and the other for modeling sub-system and system costs. A set of required characteristics for each type of models is identified. The paper finds that most of the existing models do not fully satisfy the identified requirements. Therefore, two new models are proposed, and their appropriateness is illustrated by a numerical example.
Original languageEnglish
Pages (from-to)185-194
Number of pages10
JournalInternational Journal of Production Economics
Volume83
Issue number2
DOIs
Publication statusPublished - 11 Feb 2003

Keywords

  • Characteristics
  • Life cycle cost
  • Statistical distribution model
  • Subjective probability modeling

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics
  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering

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