On the mathematical modelling of whole-life costs

Published mathematical whole-life costing (WLC) models are investigated to identify their strengths and weaknesses. Various models have been evaluated against five evaluation criteria including: scope of application, ease of implementation, computational effectiveness, transparency, and theoretical soundness. The first evaluation criterion look sat the applicability of WLC models in various whole life phases. The second criterion evaluates ease of implementation in terms of data requirements and ease of computer implementation. The third criterion assesses the computational efficiency of models to do basic WLC calculations. The fourth criterion assesses models in terms of clarity of definitions, the type of the cost breakdown structure and the ease of tracking WLC contributions of various cost elements. The fifth criterion looks at various assumptions and simplifications employed within various models. Results of the study have shown that most of published WLC models use the same basic equation. However, they differ in the breakdown of cost elements. Besides, each of these models seems to have some advantages and disadvantages regarding specific WLC applications. The paper concludes by discussion how existing models can be developed to offset their inherent weaknesses.