Title: IGNORANCE, CONFIDENCE, AND THE QUEST FOR MEANINGFUL LIFE CYCLE COST ANALYSIS
Abstract: This article is the first in a series discussing the details of life cycle cost analysis (LCCA). The purpose of LCCA is not to justify decisions but to help make better investment decisions for highway infrastructure. The basic steps in performing an analysis are the following: determine appropriate strategies, estimate the cost of these strategies, determine future maintenance and rehabilitation strategies with costs and appropriate timing, determine a discount rate, and perform calculations. Determining appropriate strategies is relatively easy. A condition survey of the road will provide information on what distresses are present to help determine corrective actions. Estimating costs is also fairly straightforward. The main difficulty comes during step three: estimating performance of the pavement and future maintenance or rehabilitation. Historical records from pavement management systems are a good start, but care must be taken in how the data are used. Large variations in performance may be due to the use of out-of-spec material, inadequate design, more traffic than anticipated, or stripping mix. Short-term performance of newer strategies may be compared with short-term performance of older strategies to see what, if any, increase in performance there may be. Most LCCAs use a discount rate between 3% and 5%. Lower discount rates increase the impact of future maintenance and rehabilitation costs on the analysis which, in turn, may offset higher initial costs. The analysis period is the final item to determine before the analysis. The Federal Highway Administration's LCCA Policy Statement recommends an analysis period of at least 35 years for all pavement projects, including new or total reconstruction as well as restoration and resurfacing projects. When doing the analysis, the variability of the inputs should be considered by using sensitivity analysis or probabilistic procedures.
Publication Year: 2000
Publication Date: 2000-07-01
Language: en
Type: article
Access and Citation
AI Researcher Chatbot
Get quick answers to your questions about the article from our AI researcher chatbot