1、Designation: A1068 10Standard Practice forLife-Cycle Cost Analysis of Corrosion Protection Systemson Iron and Steel Products1This standard is issued under the fixed designation A1068; the number immediately following the designation indicates the year oforiginal adoption or, in the case of revision,
2、 the year of last revision. A number in parentheses indicates the year of last reapproval. Asuperscript epsilon () indicates an editorial change since the last revision or reapproval.1. Scope1.1 This practice covers a procedure for using life-cycle cost(LCC) analysis techniques to evaluate alternati
3、ve corrosionprotection system designs that satisfy the same functionalrequirements.1.2 The LCC technique measures the present value of allrelevant costs of producing and rehabilitating alternative cor-rosion protection systems, such as surface preparation, appli-cation, construction, rehabilitation,
4、 or replacement, over aspecified period of time.1.3 Using the results of the LCC analysis, the decisionmaker can then identify the alternative(s) with the lowestestimated total cost based on the present value of all costs.1.4 This standard does not purport to address all of thesafety concerns, if an
5、y, associated with its use. It is theresponsibility of the user of this standard to establish appro-priate safety and health practices and determine the applica-bility of regulatory limitations prior to use.2. Referenced Documents2.1 ASTM Standards:2E917 Practice for Measuring Life-Cycle Costs of Bu
6、ildingsand Building Systems2.2 Other Documents:TM-5-802-1 Economic Studies for Military ConstructionDesignApplications (12/86)Federal Office of Management and Budget Guidelines andDiscount Rates for Benefit-Cost Analysis of FederalPrograms and state documents for guidelines or require-ments.3. Termi
7、nology3.1 Definitions:3.1.1 common costs, ncosts common to all alternatives innature and amounts such as initial planning fees or futureannual inspection costs.3.1.2 discount rate, nthe investors time value of money,expressed as a percent, used to convert the costs occurring atdifferent times to equ
8、ivalent costs at a common point in time.3.1.3 corrosion protection project, na project having adefinable, functional corrosion protection requirement that canbe satisfied by two or more systems.3.1.4 future costs, ncosts required to keep the systemoperating that are incurred after the project is pla
9、ced in service,such as surface preparation, maintenance, rehabilitation, orreplacement costs.3.1.5 inflation, nthe general trend or rising prices thatresult in reduction of the purchasing power of the dollar fromyear to year over time.3.1.6 initial cost, nthe total of all costs, such as surfaceprepa
10、ration, material purchase costs, and construction andinstallation costs, that are specific to each alternative and areincurred to bring each alternative to a point of functionalreadiness.3.1.7 material service life, nthe number of years ofservice that a particular material, system, or structure will
11、provide before rehabilitation or replacement is necessary.3.1.8 project design life, nthe planning horizon for theproject, expressed as the number of years of useful life requiredof the iron and steel product.3.1.9 rehabilitation cost, nthe total of all costs incurred toextend the material service l
12、ife of a specific alternative.4. Summary of Practice4.1 This practice outlines a procedure for conducting anLCC analysis of two or more corrosion protection alternativesover a specified project design life. It identifies the project dataand general assumptions necessary for the analysis and themetho
13、d of computation.5. Significance and Use5.1 LCC analysis is an economic method for evaluatingalternatives that are characterized by differing cash flows overthe designated project design life. The method entails calcu-lating the LCC of each alternate capable of satisfying the1This practice is under
14、the jurisdiction of ASTM Committee A05 on Metallic-Coated Iron and Steel Products and is the direct responsibility of SubcommitteeA05.13 on Structural Shapes and Hardware Specifications.Current edition approved Dec. 1, 2010. Published January 2011. DOI:10.1520/A1068-10.2For referenced ASTM standards
15、, visit the ASTM website, www.astm.org, orcontact ASTM Customer Service at serviceastm.org. For Annual Book of ASTMStandards volume information, refer to the standards Document Summary page onthe ASTM website.1Copyright ASTM International, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, PA 19
16、428-2959, United States.functional requirement of the project and comparing them todetermine which has (have) the lowest estimated LCC over theproject design life.5.2 The LCC method is particularly suitable for determiningwhether the higher initial cost of an alternative is economicallyjustified by
17、reductions in future costs (for example, rehabilita-tion, or replacement) when compared to an alternative withlower initial costs but higher future costs. If a design alterna-tive has both a lower initial cost and lower future costs thanother alternatives, an LCC analysis is not necessary to showtha
18、t the former is the economically preferable choice.6. Procedure6.1 The procedure for performing an LCC analysis forcorrosion protection systems is summarized in the followingsteps:6.1.1 Identify the project objectives, alternatives, and con-straints (6.2).6.1.2 Establish the basic assumptions (6.3).
19、6.1.3 Compile data (6.4).6.1.4 Compute the LCC for each alternative (6.5).6.1.5 Evaluate the results (6.6).6.2 Project Objectives, Alternatives, and Constraints:6.2.1 Specify the design objective that is to be accom-plished, identify alternative systems or designs that accomplishthat objective, and
20、identify any constraints that may limit theoptions to be considered.6.2.2 An example is the design of a parking garage for aresidential development project. The system must satisfymandated objectives such as specified construction schedule,load factors, and clearance height. Available alternatives,
21、suchas different objectives such as specified construction schedule,load factors, and clearance height. Available alternatives, suchas different corrosion protection systems or materials, mayhave different initial costs as well as expected future costs. Thesystem design may be constrained by access
22、for future main-tenance, number of footers, etc.6.3 Basic Assumptions:6.3.1 Establish the uniform assumptions to be made in theLCC analysis of all alternatives. These assumptions include theselection of discount rate, treatment of inflation, generalinflation rate, project design life, and desired co
23、mprehensive-ness of the analysis.6.3.2 Discount RateThe discount rate selected shouldreflect the owners time value of money. That is, the discountrate should reflect the interest rate that makes the ownerindifferent about paying or receiving a dollar now or at somefuture time. The discount rate is u
24、sed to convert the costsoccurring at different times to equivalent costs at a commonpoint in time.6.3.2.1 No single correct discount rate exists for all owners.Selection of the discount rate should be guided by the rate ofreturn on alternative investment opportunities of comparablerisk (that is, the
25、 opportunity costs of capital) or, in the case ofsome public organizations, on mandated or legislated federal orstate requirements.6.3.2.2 The discount rate may include general price inflationover the study period. This discount rate is referred to as thenominal discount rate in this practice. The d
26、iscount rate mayalso be expressed as the real earning power of money over andabove general price inflation, referred to as the real discountrate.6.3.2.3 A nominal discount rate (dn) and its correspondingreal discount rate (dr) are related as follows:dr51 1 dn1 1 I1or (1)dn5 1 1 dr!1 1 I! 1where:I =
27、rate of general price inflation.6.3.2.4 The same discount rate should be used when evalu-ating each design alternative. Table 1 contains a procedure tofollow when developing the discount rate. This procedure canbe applied by those who wish to select their own values as wellas those required to follo
28、w mandated or legislated require-ments.6.3.3 InflationThis practice is designed to accommodateonly a uniform rate of general inflation. The LCC can becalculated in constant dollar terms (not including generalinflation) or current dollar terms (including general inflation).If the latter is used, a co
29、nsistent projection of general priceinflation must be used throughout the LCC analysis, includingadjustment of the discount rate to incorporate the generalinflation (6.3.2.2). The percentage change in the GNP deflatorand producers price index are two broad indicators of generalinflation.6.3.3.1 If t
30、he user desires or is required to treat inflation onan incremental (differential) basis, or uniquely to each indi-vidual cost component (for example, energy costs), he or sheshould consult either TM-5-802-1 or Practice E917, respec-tively.6.3.4 Project Design LifeThe project design life (3.1.8)shoul
31、d be established from mandated public policy, legislatedrequirements, or selection by the owner based on situationrequirements. The same design life must be used for eachalternative under comparison and for all cost categories underconsideration. The potential for future obsolescence, that is, thepo
32、tential that future changes may modify corrosion protectionsystem requirements, should be considered when selecting aproject design life.6.3.5 ComprehensivenessThe appropriate degree of pre-cision and detail to use in an LCC analysis is dependent on theintended use of the analysis. A less comprehens
33、ive or detailedanalysis may be sufficient for ranking many alternativesroughly, whereas a more comprehensive analysis may benecessary for selecting from among a few close alternatives. Inany case, omitting significant factors from an LCC analysisdiminishes the usefulness of the results.6.3.6 Sensiti
34、vity AnalysisNo analysis can be more precisethan the accuracy of the data and assumptions used in thecalculation. The LCC can be calculated for a range of assump-tions when uncertainty exists regarding basic assumptions (forexample, cost estimates, design life, discount rate, etc.). Theresults of th
35、ese calculations will show the user the extent towhich the results are sensitive to variations of the keyassumptions.A1068 1026.4 Compilation DataCompile the following data specificto each alternative under consideration:6.4.1 Initial CostsThe estimated dollar amount of allcosts required to bring th
36、e alternative system to a point offunctional readiness.6.4.2 Material Service LifeThe number of years of ser-vice expected of the alternate under study. Material service lifevaries depending on the coating material, environment, andapplication. Potential changes in environmental conditions thatmay a
37、ffect the material service life should be considered. Jobsite tests, published reports, manufacturer product data, andlocal experience can be used to establish the service life foreach material. If the material service life is shorter than theproject design life (3.1.8), the analysis must include th
38、e futurecost to extend the service life sufficiently through rehabilitationor replacement in order to at least equal the project design life.6.4.3 Future CostsCost estimates should be made for allsignificant items that are estimated to be required to allow thecorrosion protection system to satisfy p
39、erformance require-ments over the project design life. Common costs (1.1) may beexcluded without affecting the relative ranking of the alterna-tives under study. The cost estimates should be made inconstant dollars (not including inflation) in the same timeframe as the estimate of initial costs.6.4.
40、3.1 Operating CostAn estimate of the annual cost forlabor, power, and consumable materials and supplies requiredto have a functional corrosion protection system. Except forextreme environmental conditions, most corrosion protectionsystems do not have significant annual operating costs.6.4.3.2 Rehabi
41、litation CostsThe cost of major repairs toextend the material service life to equal or exceed the projectdesign life. The years in which the rehabilitation is plannedshould be noted if more than one rehabilitation is anticipated.6.4.3.3 Replacement CostThe timing and cost estimatefor complete replac
42、ement of any corrosion protection systemcomponent. Care should be taken to determine whether theservice life of the replaced material or component will at leastequal the project design life. If not, rehabilitation or furtherreplacement will be necessary.6.5 Computation of Life-Cycle CostsTo compute
43、the LCCfor a corrosion protection system, all relevant cost flows overthe design life of the project are discounted back to the presentand summed.6.5.1 Find the present value (PV) of each cost category (forexample, initial cost (IC) and rehabilitation or repair (R), usingthe appropriate discount for
44、mula in this section. Then sumthese present values to find the PVLCC, for example:PVLCC 5 PVIC 1 PVR (2)6.5.2 Initial costs are assumed in this practice to occur in thebase year (year zero). No discounting is required.6.5.3 Future costs expected to occur at a single point in time(for example, rehabi
45、litation costs) can be discounted to presentvalue by multiplying the estimated current cost of the item bythe single present value factor as follows:PVAs5 As S11 1 drDn(3)where:As= single amount,dr= real discount rate (Table 1), andn = number of years from year zero to the time of thefuture single a
46、mount expenditure.NOTE 1The factor developed in this equation is generally known asthe present value factor and can be found in financial tables of discountrates.6.5.4 Example calculations are presented in Appendix X1.6.6 Comparison of Life-Cycle Costs:6.6.1 After calculating the LCC for each altern
47、ative, com-pare them to determine which alternative has the lowest LCC.TABLE 1 Discount Rate Procedure1.0 GeneralThis procedure is intended to guide the user indeveloping a real discount rate, that is, the long-term rate of returnover and above the general inflation rate. This procedure can beused b
48、y those required to use rates specified by mandate orlegislated requirement, as well as those desiring to select their ownvalues. This procedure does not recommend any specific rates; thatselection is up to the user and should be made based on theconsiderations described in 6.3.2.1.1.1 Is there a di
49、scounted rate that must be used by policy, mandate,or legislated requirements? (check one):1.1.1 _ Yes. If yes, the discount rate is _ %1.1.2 _ No. Proceed to 2.1.2 _ Does the discount rate in 1.1.1 include inflation? (checkone):1.2.1 _ Yes. If yes, the inflation rate is _ % (proceed to 2.4)1.2.2 _ No. The rate shown in 1.1.1 is the real discount rate(excludes general inflation) and can be used as dr in (Eq 3)2. If no discount rate is mandated, two approaches are possible:2.1 Select a long-term percentage rate of return on invested
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