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 language | English |
|---|---|
| Pages (from-to) | 69-75 |
| Number of pages | 7 |
| Journal | International Journal of Production Economics |
| Volume | 89 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - 8 May 2004 |
Keywords
- Budget over-run
- Budget under-run
- Compromise over-budget quantity
- Life-cycle cost
ASJC Scopus subject areas
- General Business,Management and Accounting
- Economics and Econometrics
- Management Science and Operations Research
- Industrial and Manufacturing Engineering