| Financial analysis: |  |
| Environmental impact analysis: | --- |
| Waste management/P2: | --- |
| Environmental cost listing/database: | --- |
| Cost estimation: | --- |
| Alternative product/process comparison: | |
| Financial analysis: | |
| Environmental impact analysis: | --- |
| Waste management/P2: | --- |
| Environmental cost listing/database: | --- |
| Cost estimation: | --- |
| Alternative product/process comparison: | |
This software product has been brought out by Moore Co. for educational purposes to allow users to conduct a life-cycle cost analysis on their computer control system and compare that with Moore's product, APACS. The system is not commercially available. The disk was brought out to demonstrate the principles discussed in an article "Just How Expensive is Your Control System," in the November 1994 issue of INTECH (volume 41, number 5, page 33).
The demonstration disk consists of three files. The first calculates life cycle costs and guides users through an exercise that already has default values (users can change these). The system prompts users for input information related to design, purchase, installation, start-up, and yearly costs. It calculates the present value of all the costs. The second file calculates the safety and reliability metrics of several common system architectures. The inputs include failure rates, diagnostic coverage factors, and common cause factors. The third file is a spreadsheet, similar to that in the first file, and includes a number of input variables grouped in categories and calculates LCC as a function of these.
| Raw material acquisition | --- |
| Manufacturing stage | --- |
| Use/reuse/maintenance | |
| Recycle/waste management | --- |
The definition of a life cycle used here is the total cost of a process/product from the initial outlay through all related future costs (maintenance, replacement and other operations) that may be incurred as a consequence of the initial investment decision. Thus, it would actually cover only one stage in the life cycle, the use/reuse of a process control system, including the initial purchase cost. No effects (if any) external to the company are considered. Information on the efficiency and key features is not included. However, examples are provided of how safety and reliability metrics related to systems can be calculated, with some common systems as examples
| Conventional | |
| Potentially hidden | |
| Contingent | --- |
| External | --- |
The methodology considers conventional costs and hidden costs associated with maintenance, failure, and operating expenses. Since the program also includes an Excel spreadsheet, within which users can include estimates for other cost categories. However, they would need to develop these estimates on their own. The same structure can also be used to compare two completely different items-products, materials, or projects. However, since Excel is not designed as an estimating program, users should enter project totals for simplicity.
As discussed in the software summary, the system consists of Excel files that list input variables and default values. It uses unit costs and time, or data plugged into list estimates. The formulas used can be viewed and analyzed. Users can customize the files to include information that reflects their applications. The system does not help in general cost estimation, other than providing default values related to the APACS system.
| Net present value (NPV) | --- |
| Payback period | --- |
| Internal rate of return (IRR) | --- |
| Benefits cost ratio | --- |
| Other | |
The files contain formulas to perform various arithmetic functions (totals and subtotals) and to calculate present values of all future expenses. The software does not compute NPV because no benefit information is entered. However, users can always modify the formulas and information to do so. Excel has financial functions that include PV, NPV and IRR.
The program includes functions performed within an Excel spreadsheet. Even though the definition used for LCC is different from ours, the software gives a useful example of total cost calculation. The INTECH article points out that most users do not take total costs into account, despite the intuitive logic for doing so. This is due to the uncertainty, difficulties and unfamiliarity involved in estimating costs such as future maintenance and failure costs. This is probably true of other cases as well.
The system does not discuss the issues involved in the choice of discount rate and the example given does not take inflation into account. No life-cycle environmental cost information or estimating methods are provided. The recycle/waste management stage is not included in the analysis. The system and the cost estimates provided and the discussion serve a narrow purpose: to demonstrate life-cycle cost calculation for process control systems. If users want to apply this for other applications, they will need to develop the required information. Since this is not a commercial product, there is no user-support for applications that are not related to the original purpose.
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