Relex LCC: Cost Optimization Software

1. RelexReliability Software“the intuitive solution!”Relex Software Corporation 1

2. Relex Life Cycle Cost

3. Life Cycle Cost Analysis • Calculate all lifetime costs of a system • Calculate Net Present Value (NPV) • Perform Sensitivity Analysis • Evaluate Alternatives COST OPTIMIZATION!

4. What is Relex LCC? • A capable life cycle cost package • Establish the system cost breakdown structure (CBS) • Use the equation editor to assign cost equations • May be installed… • As an integral part of a Relex package • As a stand-alone package

5. What does Relex LCC do? 1. Develop “cost models” for each element 2. Calculate the total life cycle cost 3. Generate useful reports

6. Relex Life Cycle Cost Relex Project Database Relex LCC Database Reliability Data Maintainability Data Cost, etc.

7. Relex Life Cycle Cost

8. Establishing the CBS... A simple example: Total System Cost • Research and Development Cost • Investment Cost • Operations and Maintenance Cost • System Phaseout and Disposal Cost

9. Extending the CBS... Operations and Maintenance Cost • Operations Cost • Operating Personnel Cost • Operator Training Cost • Operational Facilities Cost • Support and Handling Equipment Cost • Maintenance Cost • System/Equipment Modifications Cost

10. Once CBS Established. . . • Define equations for CBS items • Operational Facilities Cost = Operational facility space cost ($/sq. ft./site) * Number of operational sites * Facility space requirements (sq. ft.)

11. Levels of Data in Relex LCC • CBS • Variables • Alternatives • Time Intervals

12. LCC Variables • Store data pertinent to calculating cost • Simplify entry of cost equations • There are 3 types of Variables: • Common variables • Item variables • Project variables • Stored within variables files in LCC file

13. Project Independent Variables • Common Variables “global variables”/applicable to all CBS items • Item Variables “special variables”/applicable to specific CBS item

14. Project Variables • Link LCC to data in Project file(s) • May be inserted in cost equations • Included automatically in each LCC file • Example: Project Failure Rate

15. Alternatives • Link LCC analysis to data in Project file(s) • Determine most cost effective solution • Example: Alternative #1: completely redesign a system Alternative #2: modify the current design • Stored in Alternatives file w/i LCC file • Allow for custom calculations

16. Time Intervals • Consider costs in various time intervals • Interval may be any unit of time • Each interval represents an equivalent duration • Example: 5 year period, 5 one year intervals

17. Time Intervals • Define “interest rate” (or inflation rate) • Determine Net Present Value (NPV) • Incur costs now or later?

18. Variable Definition • Constant • Varies over Alternatives • Varies over Time Intervals • Varies over Alternatives & Time Intervals

19. Step-by-Step LCC Analysis 1. Create/open LCC file 2. Establish the Cost Breakdown Structure 3. Define Alternatives 4. Define Time Intervals 5. Define Variables 6. Enter cost equations for CBS items 7. Calculate and generate reports

20. Relex Demonstration