eLearning Courses for PRICE Cost Analytics

Blog Banner


Anthony Demarco Bruce Fad Arlene Minkiewicz Zach Jasnoff John Swaren Gurney Thompson Joe Bauer Melissa Winter Price Systems Chris Price Bill Williamson

Basic Maintenance Methods: Understanding How Life Cycle Costing Works #1

Life Cycle Maintenance cost is the cost of keeping the equipment LRUs (Line Replaceable Units) running after they have been produced and sent to their operating position. (Fielded or Deployed)

“Why are we interested in this cost?”

Depending on how long the equipment is intended to be used, this cost may be 2-4 times the Production Cost. Knowing this will support program planning for years to come.

Starting when the equipment is first used, there are important parameters to be considered:

  • How many units are deployed?
  • How many years is the equipment to be used?
  • How many hours per month are the Units “ON” or “in use”?
  • How often do the Units fail?
  • How long does it take to repair the Units?

Using these basic parameters, we can calculate the average number of failures during each Unit’s deployment and thus the cost. For Example, assuming there is an average of 8766 Hours per year. If the Units are operated 4383 Hours (50% of the Hours in a Year) each year, and the time between failures is also 4383 Hours, the Units will fail (on average) once every Year.

This means the Units need (Typically) some Labor to repair the unit, and a replacement item used during the repair.

The actual cost of the repair depends on how the Unit is repaired. For Example, the unit may crack apart and be totally unrepairable, which means that the cost is the labor it takes to remove and replace the failed Unit and the cost of the failed Unit.

Not all repairs are as simple as this, and to try to anticipate how the Unit is Repaired, there are 28 Standard Concepts. A LRU may consist of a single Part, or, as an LRU gets larger, it is typically made up of Modules (themselves a collection of parts) and / or other parts. Although a failure may be the entire LRU, a Module inside the LRU may fail or the failure may be a single Part.

Concepts are used to describe how an item is repaired. There are 28 standard Concepts which are methods of describing how and where a specific LRU or Module is repaired.

Typically, in the Government Sector, there can be repairs on the actual LRU, sending the LRU or faulty Module to an Organizational (ORG) repair location (able to perform many repairs), sending the LRU or faulty Module to an Intermediate (INT) repair location (able to perform more complex repairs), or sending and LRU or faulty Module to a Government or Contractor Depot that is able to repair the most serious repairs.

Some of the Concepts are obviously more expensive than others, for example, Discarding Unit at Failure means that at every reported failure a New Unit is required.

Notes:

  • In some cases, replacing a long lasting, low cost Unit may be more economical that trying to repair it.
  • In many cases, the responsible authority (Agency producing and deploying the LRUs) mandates the type of repair.
  • In others, the authority wants an analysis to find the lowest cost method of repair.