1LIFE CYCLE COST CALCULATION MODELS FOR BUILDINGS

Most commonly, production cost is the main cost factor in construction and is often set to the minimum, which does not necessarily improve the lifetime performance of buildings. However, a higher production cost might decrease total life cycle cost (LCC). It is important, therefore, to show the construction client in the early design phase the relationship between design choices and the resulting lifetime cost. Today, LCC calculation is used extensively for industrial products to minimise production cost and increase profit. Clearly, there are significant differences between an industrial product and a building from the life cycle perspective. The main differences are the life of a building and the lack of industrialisation in the building process, especially during construction. These factors make calculating LCC for a building difficult early in the design process. This paper presents a state of the art analysis in the area of LCC for construction. It offers a structural overview of theoretical economic methods for LCC analyses and their restrictions as described in the literature. The paper also reveals the primary data which are required to carry out a LCC analysis and discusses limitations in the application of life cycle costing from the client’s perspective. 1