Life-cycle cost analysis (LCCA): a comparison of commercial flooring
Abstract
Purpose
The business case for facility expenditures is grounded in the knowledge that life-cycle economics is significant to the continued viability of the facility. The aim of this study is to develop an algorithm for life-cycle cost analysis (LCCA) and evaluate flooring products to inform decision makers about the long-term cost of ownership.
Design/methodology/approach
The protocol for executing an LCCA is defined by the National Institute of Standards and Technology, including defining the problem, identifying feasible alternatives and establishing common assumptions and parameters, as well as acquiring financial information. Data were provided by an independent third-party source.
Findings
The results of this study are twofold: assess functionally equivalent flooring alternatives to determine the best financial value and develop a replicable protocol and algorithm for LCCA. The study found that modular carpet was the best financial solution. As a tool for decision makers, this LCCA informs asset management about the long-term cost of ownership, providing a protocol for making practical, informed decisions for the lowest cost solution for functionally equivalent alternatives.
Research limitations/implications
Projecting LCCA beyond 15 years may have limited value based on potential changes in the financial climate. Further research should focus on the implications of changes in the discount rate over time and testing the algorithm on other building systems.
Practical implications
Maintenance costs are considerable when compared to initial cost of flooring. Equipment costs have a significant impact on long-term cost of ownership. Using LCCA to inform specifications and to determine the best solution for a building system such as flooring provides an evidence-based process for building design and facility management.
Social implications
Life-cycle costs have a significant impact on the financial health of an organization. Using LCCA to make informed decisions about facility design and specifications may contribute to increased financial stability and resources to benefit the organization’s long term goals.
Originality/value
This study contributes an algorithm instrument for buildings and building systems. The flooring tested with this protocol provides evidence to inform flooring selection based on lowest cost while considering other factors that inform appropriate selection of flooring materials.
Keywords
Acknowledgements
The authors wish to thank all of the manufacturers, distributors and installers who contributed their expertise to inform this research. They would also like to thank RS Means for providing independent third-party cost data. Finally, the authors would like to thank Interface for funding this research, recognizing the value of rigorous, independent research contributing to evidence informed decisions for environmental design. The funder was not involved in the design, execution or analysis of this study.
Citation
Harris, D. and Fitzgerald, L. (2017), "Life-cycle cost analysis (LCCA): a comparison of commercial flooring", Facilities, Vol. 35 No. 5/6, pp. 303-318. https://doi.org/10.1108/F-10-2015-0071
Publisher
:Emerald Publishing Limited
Copyright © 2017, Emerald Publishing Limited