Life Cycle Cost Analysis

 a tool or an evaluation technique to informed

decision-making for investment
 follows principles of economic analysis
 brings best return on investment
 a valuable component of Transportation Asset
Management (TAM) strategy
 Application
 Highway projects
 Rehabilitation and preservation for pavement
projects
 Bridge projects
 Other Public Works investments
 Pre-requisites
 A decision to implement a project is in place
 Objective(s) of project implementation is
known/fixed
 Benefit(s) of project implementation is
known/fixed
 More than one ways (alternatives) exist to
accomplish the same objective(s)
 All alternatives bring the same benefit(s)
 The LCCA Process
(as applied to pavement management)

1. Establish alternative pavement design strategies for the analysis

period.
2. Determine performance periods and activity timing.
3. Estimate agency costs.
4. Estimate user costs.
5. Develop expenditure stream diagrams.
6. Compute net present value.
7. Analyze results.
8. Reevaluate design strategies.

N.B.

This is important to note that the lowest LCC alternative may not sometimes be implemented
due to other considerations such as risk, available budget, and political and environmental
concerns.
Cont….
 Typical Guidelines for LCCA
(as applied to pavement management)

1. Determine the rehabilitation cost of the existing pavement.

2. Calculate the cost of each new pavement layer that will be placed on the
mainline.
3. Calculate the total mainline pavement layer cost.
4. Calculate the cost for each pavement layer on the shoulders.
5. Calculate the total shoulder pavement layer cost.
6. Determine the traffic control cost for initial construction and
rehabilitation of the existing pavement.
7. Determine the total initial construction cost.
8. Determine future rehabilitation costs.
9. Determine user delay costs.
10. Determine present worth of future rehabilitation.
11. Calculate total present worth.
12. Determine the annualized cost of the project.
A typical decision matrix
Steps in Work Zone User Cost Computation

 Step 1. Project Future Year Traffic Demand

 Step 2. Calculate Work Zone Directional Hourly Demand
 Step 3. Determine Roadway Capacity
 Step 4. Identify the User Cost Components
 Step 5. Quantify Traffic Affected by Each Cost Component
 Step 6. Compute Reduced Speed Delay
 Step 7. Select and Assign VOC Rates
 Step 8. Select and Assign Delay Cost Rates
 Step 9. Assign Traffic to Vehicle Classes
 Step 10. Compute User Cost Components by Vehicle Class
 Step 11. Sum Total Work Zone User Costs
 Step 12. Address Circuity and Delay Costs
 Table 3.21. User cost component #1 - speed
change VOC (55-40-55 mph)
 No. of vehicles undergoing speed change =
4,597
 No. of passenger cars = 4092 (89% of 4,597)
 Added VOC = 83.47 - 52.70 = 30.77 per 1,000
passenger cars (Table 3.17)
 VOC per day = 4,092 x 30.77 / 1,000 = $ 126
 For 60 days = 126 x 60 = $ 7,554

 VOC = Vehicle Operating Cost

Table 3.22. User cost component #2 - speed change
delay cost (55-40-55 mph)

 No. of vehicles suffering delay due to speed

change = 4,597
 No. of passenger cars = 4,092 (89% of 4,597)
 Added delay time (hr) = 5.84 - 4.42 = 1.42 per
1,000 passenger cars (Table 3.17)
 Delay cost rate = $ 11.58 per Veh-hr
 Cost per day = 4,092 x 1.42 / 1,000 x 11.58 = $ 67
 For 60 days = 67 x 60 = $ 4,037
Table 3.23. User cost component #3 - work
zone reduced speed delay
 No. of vehicles suffering delay due to reduced
speed in work zone = 29,004
 No. of single – unit trucks = 1,740 (6% of 29,004)
 Added delay time (hr per veh) = 5.25/40 –
5.25/55 = 0.035795
 Delay cost rate = $ 18.54 per Veh-hr for trucks
 Cost per day = 1,740 x 0.035795 x 18.54 = $
1,155
 For 60 days = 1,155 x 60 = $ 69,295
 Table 3.24. User cost component #4 -
stopping VOC (55-0-55 mph)
 No. of vehicles stopping = 51,677
 No. of combination trucks = 2,584 (5% of 51,677)
 Added VOC = 1,017.70 - 0 = 1,017.70 per 1,000
combination trucks (Table 3.17)
 VOC per day = 2,584 x 1,017.70 / 1,000 = $ 2,630
 For 60 days = 2,630 x 60 = $ 157,800
 Table 3.25. User cost component #5 -
stopping delaty cost (55-0-55 mph)
 No. of vehicles suffering delay due to stopping
= 51,677
 No. of single – unit trucks = 3,101 (5% of
51,677)
 Added delay time (hr) = 8.07 - 0 = 8.07 per
1,000 single – unit trucks (Table 3.17)
 Delay cost rate = $ 18.54 per Veh-hr
 Cost per day =3,101x 8.07 / 1,000 x 18.54 = $ 464
 For 60 days = 464 x 60 = $ 27,840
Table 3.26.User cost component #6 - Idling
VOC
 This is sensitive to time of the day while
vehicle is in go-stop situation in a queue
 No. of passenger cars engaged in idling
between 3 p.m. to 8 p.m. = 24,270
 Added idling time (hr) = 0.8211
 Idling VOC rate = $ 692.70 per 1000 Veh-hr for
passenger cars
 Cost per day = 24,270 x 0.8211 x 692.70 = $
13,804
 For 60 days = 13,804 x 60 = $ 828,240
 Table 3.27. User cost component #7 -
queue reduced speed delay cost
 This is sensitive to time of the day while
vehicle is moving slowly in a queue
 No. of passenger cars engaged in idling
between 3 p.m. to 8 p.m. = 24,270
 Added delay time (hr) = 0.8211
 Delay cost rate = $ 11.58 per Veh-hr for
passenger cars
 Cost per day = 24,270 x 0.8211 x 11.58 = $
230,760
 For 60 days = 230,760 x 60 = $ 13,845,600
 Data Tables
 Table 3.11. Summary of traffic affected by each cash component.
 Table 3.12 Work zone reduced speed delay
 Table 3.13 Queue Speed
 Table 3.14. Average queue length calculations.
 Table 3.15. Average Queue Length - alternative approach
 Table 3.16. Average Queue Delay Time
 Table 3.17. Added Time and Vehicle running cost/1,000 stops and
idling costs (Aug 96 $)
 Table 3.18 Speed change computations.
 Table 3.19. Recommended values of travel time ($/Veh
-Hr) (Aug 96 $)
 Table 3.20. Affected traffic by vehicle class and user cost compone
nt.
 Data Tables contd…
 Table 3.21. User cost component #1 - speed change VOC (55-40-55
mph)
 Table 3.22. User cost component #2 - speed change delay cost (55-
40-55 mph)
 Table 3.23. User cost component #3 - work zone reduced speed de
lay
 Table 3.24. User cost component #4 - stopping VOC (55-0-55 mph)
 Table 3.25. User cost component #5 - stopping delay cost (55-0-55
mph)
 Table 3.26.User cost component #6 - Idling VOC
 Table 3.27. User cost component #7 - queue reduced speed delay c
ost.
 Master Summary
 Table 3.28. Master summary - total (60 days) w
ork zone user cost (August 96 $)
 Table 3.28. Master summary - work zone user
cost distribution (%)
 Important Graphs
Vehicle and Work Zone User Cost Component Breakup
100%

90%

80%
User Cost Distribution (%)

70%

60%

50%

40%

30%

20%

10%

0%
Speed Change Speed Change WZ-Reduced Stopping VOC Stopping Delay Queue Idling Queue Speed
VOC Delay Speed Delay VOC Delay
 Important Graphs Contd…
WZ User Cost Distribution - Vehiclewise
90.0%

80.0%

70.0%
USer Cost Distribution (%)

60.0%

50.0%

40.0%

30.0%

20.0%

10.0%

0.0%
Passenger Cars SU Trucks Comination Trucks