Selecting the best alternative based on life-cycle cost distributions of alternatives

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

Research output: Journal article publicationJournal articleAcademic researchpeer-review

14 Citations (Scopus)

Abstract

Life-cycle cost (LCC) analysis can be used to select the best alternative among a set of candidates. The LCC is often treated as a random variable due to uncertainties. As a result, it is often represented by a distribution (or its first four moments) rather than a deterministic value. It is a challenge how to select the best alternative based on a set of given distributions. Mathematically, this deals with comparing magnitudes of the random variables representing the LCCs of alternatives. This paper develops an analytical framework to tackle this problem. The approach is illustrated by a numerical example.
Original languageEnglish
Pages (from-to)69-75
Number of pages7
JournalInternational Journal of Production Economics
Volume89
Issue number1
DOIs
Publication statusPublished - 8 May 2004

Keywords

  • Budget over-run
  • Budget under-run
  • Compromise over-budget quantity
  • Life-cycle cost

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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