Modeling running and maintenance costs for life cycle costing applications in buildings

Life cycle costing is the technique of considering the initial and subsequent running costs and residual costs of an asset over the life of a project. Running costs are defined as the total cost of operations and maintenance costs of a building. The technique is accepted to be of theoretical merit but its practical development is hindered by two extreme factors i) the absence of data in the right form and ii) difficulties in handling the plethora of data when exists. This paper describes the use of a novel approach, known as the cost-significance. for the development of simple models for running and maintenance costs in buildings. The models focus design and management effort on the high cost items. The results art drawn from analysis of operation and maintenance costs for university buildings over a period of 18 years demonstrating the feasibility of deriving a small number of items, 16% of the total number of items occurring in running costs and 30% in maintenance costs, which consistently represent some 87% of the total running costs of buildings and 70% of the total maintenance costs. The model can calculate the costs to an average accuracy of +/-5% and +/-13% for total running and maintenance costs respectively. The models were tested on new information and proved to be effective and consistent. The paper also discusses the major applications of the developed methodology and models particularly considering data collection, recording and analysis for use in life cycle costing applications in buildings.