What does Whole Life-cycle Costing (WLC) consider beyond the purchase price?

Whole Life-cycle Costing (WLC) is a comprehensive approach that assesses all the costs associated with an asset throughout its life span, not just the initial purchase price. This method takes into account the total cost of ownership, which includes various phases such as acquisition, operation, maintenance, and ultimately, decommissioning and disposal.

The inclusion of decommissioning and disposal costs in WLC is critical because these expenses can be substantial and impact the overall cost assessment of an asset. When a product is taken out of service, the financial implications of safely and responsibly disposing of or recycling it must be considered.

This broader perspective allows organizations to make more informed purchasing decisions that account for the entire life cycle of a product or service, thus ensuring better resource allocation and budget planning. By considering these costs, businesses can avoid hidden expenses that could arise later and make procurement choices that align better with their long-term financial goals.