Cost breakdown structure for life cycle cost of water pump

Abstract

Life Cycle Costing (LCC) is an essential concept that is useful in reducing cost along a lifespan of an asset or equipment. LCC concepts have been introduced to water distribution system management; which is aimed to attain the lowest network provision and operating cost. However, there is slow adoption of LCC due to the lack of framework or mechanism to collect and store the data in a systematic way. Thus, a guideline is needed in order to widely encourage the application of LCC in the water industry especially in pump purchasing decision making. However, a Cost Breakdown Structure (CBS) is a pre-requisite before performing the LCC. Thus, the objective of this study are to identify the cost element needed for estimating the LCC for treated water pump in Malaysia; the next objective is to determine the weightage of most budget spent and important phase in life cycle stages for treated water pump and to develop a CBS for treated water pump in Malaysia. In the first stage, cost elements were collected based on literature review. Next, a questionnaire survey was conducted and the data were analyzed using Analytical Hierarchy Process (AHP). Then, a CBS for treated water pump is developed and verified based on the consensus among experts of Malaysian water industry during the Delphi study. The findings indicate that the CBS for LCC treated water pump in Malaysia is classified into four phases which are; 1) initial cost (planning), 2) operating cost, 3) maintenance and repair cost and 4) disposal and upgrading cost. The AHP weightage comes with the result that operating cost is the biggest expenditure and needs to be more considered along the lifespan of treated water pump. The outcome from this study contributes to a systematic and structured data cost to develop the LCC for water pumps in Malaysia. Also, the result of the AHP can be used to help Malaysia’s water industry practitioners to allocate budget wisely in the future. Furthermore, the results of this study may be a beginning for the Malaysia’s water industry to implement LCC using the developed CBS.