Life-cycle costs are the total cost to the organization for the ownership and acquisi- tion of the product over its full life. This includes the cost of R&D, production, operation, support, and, where applicable, disposal.

It allows comparative cost assessments to be made over a specific period of time, taking into account relevant economic factors both in terms of initial capital costs and future operational and asset replacement cost. Life-cycle costing is also known as total cost of ownership (TCO).

LCC analysis is used to assess corrosion management alternatives. The current cost of corrosion is calculated by LCC analysis and characterized by the annualized value. The cost of corrosion is defined as the corrosion fraction of design, manufacturing, operation and maintenance, technology development and asset value loss.

Life-cycle cost analysis is the systematic analytical process of evaluating various alternative courses of action early on in a project, with the objective of choosing the best way to employ scarce resources. Life-cycle cost is employed in the evaluation of alternative design, configurations, alternative manufacturing methods, alternative support schemes, and so on. This process includes defining the problem (what information is needed), defining the requirements of the cost model being used, collecting historical data–cost relationships, and developing estimate and test results.

There are also several limitations to life-cycle cost analyses. They include:

• The assumption that the product, as known, has a finite life-cycle.
• A high cost to perform, which may not be appropriate for low-cost/low-volume production.
• A high sensitivity to changing requirements.

Life-cycle costing requires that early estimates be made. The estimating method selected is based on the problem context (i.e., decisions to be made, required accuracy, complexity of the product, and the development status of the product) and the operational considerations. Life-cycle cost analysis is an integral part of strategic planning.