life cycle costing

  

Definition

Procurement and production costing technique that considers all life cycle costs. In procurement, it aims to determine the lowest cost of ownership of a fixed asset (purchase price, installation, operation, maintenance and upgrading, disposal, and other costs) during the asset's economic life. In manufacturing (as an integral part of terotechnology), it aims to estimate not only the production costs but also how much revenue a product will generate and what expenses will be incurred at each stage of the value chain during the product's estimated life cycle duration.

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