A life cycle cost analysis involves the analysis of the costs of a system or a component over its entire life span. Typical costs for a system may include acquisition costs (or design and development costs), operating costs (cost of failures, cost of repairs, cost for spares, downtime costs and loss of production) and disposal costs.

A complete life cycle cost (LCC) analysis may also include other costs, as well as other accounting/financial elements (such as discount rates, interest rates, depreciation, present value of money, etc.). For the purpose of this article, it is sufficient to say that if you have all of the required cost values (inputs), then a complete LCC analysis can be performed easily in a spreadsheet, since it really involves summations of costs and perhaps some computations involving interest rates. With respect to the cost inputs for such an analysis, the costs involved are either deterministic (such as acquisition costs, disposal costs, etc.) or probabilistic (such as cost of failures, repairs, spares, downtime, etc.). Most of the probabilistic costs are directly related to the reliability and maintainability characteristics of the system. Estimating the associated probabilistic costs is the challenging aspect of LCC analysis. BlockSim can be used to obtain such costs.

The lognormal distribution is commonly used to model the lives of units whose failure modes are of a fatigue-stress nature. Since this includes most, if not all, mechanical systems, the lognormal distribution can have widespread application. Consequently, the lognormal distribution is a good companion to the Weibull distribution when attempting to model these types of units. This article explains the characteristics of the lognormal distribution and its parameters.