Life Cycle Cost versus Life Cycle Investment – A new Approach

Farinha, José Torres; Raposo, Hugo; Galar, Diego

doi:10.37394/23203.2020.15.75

Cited by 8 publications

(4 citation statements)

References 33 publications

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“…The aim of this research was to address the limitations of the existing quantitative methods used to assess the life cycle of physical assets, by offering a new approach that includes the economic dimension of sustainability and technology, beginning with existing methods [52,53]. For this purpose, a three-stage exploratory research methodology was used:…”

Section: Aim and Research Methodologymentioning

confidence: 99%

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Optimizing the Life Cycle of Physical Assets through an Integrated Life Cycle Assessment Method

et al. 2021

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The purpose of this study was to apply new methods of econometric models to the Life Cycle Assessment (LCA) of physical assets, by integrating investments such as maintenance, technology, sustainability, and technological upgrades, and to propose a means to evaluate the Life Cycle Investment (LCI), with emphasis on sustainability. Sustainability is a recurrent theme of existing studies and will be a concern in coming decades. As a result, equipment with a smaller environmental footprint is being continually developed. This paper presents a method to evaluate asset depreciation with an emphasis on the maintenance investment, technology depreciation, sustainability depreciation, and technological upgrade investment. To demonstrate the value added of the proposed model, it was compared with existing models that do not take the previously mentioned aspects into consideration. The econometric model is consistent with asset life cycle plans as part of the Strategic Asset Management Plan of the Asset Management System. It is clearly demonstrated that the proposed approach is new and the results are conclusive, as demonstrated by the presented models and their results. This research aims to introduce new methods that integrate the factors of technology upgrades and sustainability for the evaluation of assets’ LCA and replacement time. Despite the increase in investment in technology upgrades and sustainability, the results of the Integrated Life Cycle Assessment First Method (ILCAM1), which represents an improved approach for the analyzed data, show that the asset life is extended, thus increasing sustainability and promoting the circular economy. By comparison, the Integrated Life Cycle Investment Assessment Method (ILCIAM) shows improved results due to the investment in technology upgrades and sustainability. Therefore, this study presents an integrated approach that may offer a valid tool for decision makers.

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Section: Aim and Research Methodologymentioning

confidence: 99%

“…Farinha et al [52] present the concept of Life Cycle Investment (LCI). This represents a change in the concept of cost, which is traditionally assumed to be a loss.…”

Section: Literature Reviewmentioning

confidence: 99%

Optimizing the Life Cycle of Physical Assets through an Integrated Life Cycle Assessment Method

et al. 2021

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“…In this case, it will be necessary to obtain the market value for each specific piece of equipment, which may be difficult for several assets. As an alternative, various types of devaluation can be simulated, such as the following [12,41,42]:…”

Section: Literature Review: Physical Asset Managementmentioning

confidence: 99%

The Economic Management of Physical Assets: The Practical Case of an Urban Passenger Transport Company in Portugal

et al. 2023

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Organizations are increasingly concerned with new strategic guidelines and ways of managing physical assets to improve their competitiveness and sustainability. In this paper, we analyze the determinants of the economic management of physical assets in the specific case of a public passenger transport company located in one of the main cities of Portugal. Based on the case under analysis, it was possible to conclude that the economic management of physical assets is oriented by relevant indicators, including, for example, expenses associated with acquisition, maintenance, and operation. This paper provides a relevant contribution to monitoring and evaluating the life cycle of equipment, enabling more efficient and effective management of these physical assets for transport companies. We are convinced that the valuable results presented in this paper can open up new research avenues in the area of physical asset management.

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“…Additionally, macro-factors, assessed through a PESTEL (Political, Economic, Social, Technological, Environmental, and Legal) analysis, play a significant role as external factors (55002,. Some scholars also advocate for a more advanced version known as Life Cycle Investment (LCI) (see Torres Farinha et al (2020)). This approach provides a comprehensive view that considers the entire life cycle of energy production assets and the broader macro-environmental factors influencing their value.…”

Section: Introductionmentioning

confidence: 99%

Financing Sustainable Energy Transition with Algorithmic Energy Tokens

Romagnoli,

Zadeh

2023

Preprint

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Life Cycle Cost versus Life Cycle Investment – A new Approach

Cited by 8 publications

References 33 publications

Optimizing the Life Cycle of Physical Assets through an Integrated Life Cycle Assessment Method

Optimizing the Life Cycle of Physical Assets through an Integrated Life Cycle Assessment Method

The Economic Management of Physical Assets: The Practical Case of an Urban Passenger Transport Company in Portugal

Financing Sustainable Energy Transition with Algorithmic Energy Tokens

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