A product-cycle cost-analysis process and its application to the automotive environment

The author presents a life cycle cost (LCC) methodology which combines reliability engineering and cost accounting techniques to facilitate evaluation of short and long-term product effectiveness early in the development cycle. Product LCC analysis is an approach that helps to address possible warranty expenses and cost savings associated with a particular design for a designated operating life. In the automotive environment LCC is very useful in helping engineers understand how various aspects of a design (reliability, quality, and cost) can be used to interpret product effectiveness when there is constant pressure to produce reliable and cost-effective products under short development times. Using product and reliability engineering analysis data coupled with accounting, purchasing, and product service data, answers to questions concerning value of a design in the marketplace can be addressed. The LCC technique essentially involves combining unreliability data with apportioned direct repair costs to produce a LCC estimation for some particular operating period