Fundamental requirements of life cycle costing: projecting life cycle costs for electronic system modernization

Rapid advances in electronics technology with resultant obsolescence and nonavailability of currently used electronics components and devices force systems managers to continuously upgrade and modernize existing systems in order to ensure equipment supportability. This paper examines the requisite attributes of Life Cycle Cost (LCC) analysis methods needed to effectively and flexibly project long term cost requirements, perform LCC versus performance tradeoff analyses, and accurately calculate time phased cost profiles during the planning and design of system upgrades. To be effective, an LCC analysis tool must facilitate modernization and upgrade planning by allowing the decision makers to rapidly analyze life-cycle economic impacts caused by front end technical and logistic decisions. Required accuracy of the estimate and the time and resources available to complete the analysis are important factors in selecting the analytical methods to be employed. When used as an integral part of the planning process, LCC analysis provides a tool for the systematic balancing of overall cost of systems ownership with system technical and schedule requirements.