Whole Life-Cycle Costing Risk and Risk

With its mixture of established theory, best practice and innovation Whole-life costing: risk and risk responses offers a thorough grounding in both the theory and practical application of WLCC. It will help to improve accuracy of the assessments of long-term effectiveness of projects - now an essential tool for those performing risk analysis in construction investment.

Halim Boussabaine is a lecturer in the School of Architecture and Building Engineering at the University of Liverpool.

Foreword

ix

Nigel Dorman

Preface

xi

Acknowledgements

xiii

Part I: Fundamentals of Whole Life-cycle Costing

Towards an Understanding of Whole Life-cycle Costing

3

(9)

Introduction

3

(1)

Whole life-cycle costing: a brief history

4

(3)

Defining whole life-cycle costing

7

(2)

Risk and uncertainty in WLCC

9

(1)

Subjectivity in WLCC

9

(1)

Summary

10

(2)

References

10

(2)

Whole Life-cycle Costing Risk Management

12

(16)

Introduction

12

(1)

Why has the construction industry failed to embrace WLCC?

12

(1)

Why risk assessment in whole life costing?

13

(2)

Data requirements in whole life-cycle costing and risk assessment

15

(2)

Specifying a comprehensive set of objectives and measures for each WLCC component

17

(5)

A framework for whole life costing risk management

22

(4)

Summary

26

(2)

References

26

(2)

Key Decisions in the Whole Life-cycle Costing Process

28

(9)

Introduction

28

(1)

Justification for investment and extraction of client requirements

29

(2)

Key decisions at the conceptual development stage

31

(1)

Key decisions at the detailed design stage

32

(1)

Key decisions at the production stage

33

(1)

Decisions at the operational stage

34

(1)

Decisions at the end of economic life stage

35

(1)

Summary

35

(2)

References

36

(1)

Fundamentals of Whole Life-cycle Cost Analysis

37

(19)

Introduction

37

(1)

Concepts of the time value of money

37

(1)

WLCC calculation models

38

(3)

Measuring economic performance in whole life-cycle costing

41

(8)

WLCC forecasting methods

49

(3)

Benchmarking and key performance indicators

52

(1)

WLCC key performance indicators

53

(1)

Summary

54

(2)

References

54

(2)

Whole Life Risk Analysis Techniques

56

(31)

Introduction

56

(1)

Risk analysis

56

(2)

Qualitative risk analysis

58

(1)

Risk matrices

58

(2)

Risk registers

60

(1)

Event trees

61

(1)

Influence diagrams

62

(1)

SWOT analysis

63

(1)

Brainstorming sessions

63

(1)

Quantitative risk analysis

64

(1)

Probabilistic approaches to risk

64

(7)

Simulation

71

(3)

Sensitivity analysis

74

(1)

Markov theory

74

(1)

Deterministic measures of risk

75

(2)

Mathematical and analytical techniques

77

(1)

Artificial intelligence and fuzzy set theory

78

(3)

Summary

81

(6)

References

82

(5)

Part II: Whole Life-cycle Costing: The Design Stage

Design Service Life Planning

87

(19)

Introduction

87

(1)

Estimation of service life for new structures

88

(7)

Estimation of the remaining service life for existing structures

95

(8)

Summary

103

(3)

References

104

(2)

Design Environmental Life-cycle Assessment

106

(16)

Introduction

106

(1)

Life-cycle assessment

107

(3)

Life-cycle assessment for design optimisation

110

(2)

LCA tools

112

(2)

Environmental life-cycle cost

114

(3)

Case study

117

(3)

Summary

120

(2)

References

121

(1)

Whole Life-cycle Cost Planning at the Design Stage

122

(20)

Introduction

122

(1)

Design whole life-cycle cost planning

122

(1)

An integrated framework for WLC budget estimation

123

(3)

Benchmarking WLC budgets

126

(2)

Whole life cost planning

128

(13)

Summary

141

(1)

References

141

(1)

Whole Life Risk and Risk Responses at Design Stage

142

(21)

Introduction

142

(1)

Design whole life risk

143

(3)

WLC risk identification and risk response measures at design/precontract stages

146

(8)

WLCC risk categorisation

154

(1)

Design WLCC risk quantification

154

(5)

Design risk response measures

159

(2)

Summary

161

(2)

References

162

(1)

Whole Life-cycle Costing of Mechanical and Electrical Services: a Case Study

163

(16)

Introduction

163

(1)

Modelling the whole life cost of air-conditioning systems

164

(2)

Data and methodology

166

(4)

Results and discussion

170

(4)

Summary

174

(5)

References

174

(5)

Part III: Whole Life-cycle Costing: Construction and Occupancy Stages

Whole Life Risk and Risk Responses at Construction Stage

179

(12)

Introduction

179

(1)

WLCC at the construction stage

179

(1)

WLCC risk during the construction stage

180

(1)

Typology of WLCC risk at the construction stage

180

(7)

Tools for allocating WLCC construction risk

187

(1)

Significance of WLCC risk at the construction stage

188

(1)

Monitoring WLCC risk throughout the construction programme

188

(1)

Construction WLCC risk responses

189

(1)

Summary

190

(1)

References

190

(1)

Whole Life Risk and Risk Responses at Operational Stage

191

(14)

Introduction

191

(1)

WLCC risks at operation stage

191

(1)

Identifying the WLCC operational risks

192

(1)

The maintenance cost centre

193

(2)

The energy cost centre

195

(1)

The facilities management cost centre

195

(4)

Identifying the operational stage WLCC drivers

199

(1)

Operational stage WLCC: risks and risk responses

199

(5)

Summary

204

(1)

References

204

(1)

Whole Life-cycle Costing during Operational Stage

205

(18)

Introduction

205

(1)

Operational stage WLCC models

206

(1)

The importance of operational costs in WLCC

206

(1)

Conceptualising the WLCC model

206

(1)

Existing WLCC models

207

(1)

Recording WLCC data during occupancy stage

208

(2)

Forecasting energy WLCC: a case study

210

(6)

New WLCC models for operational stage WLCC analysis

216

(4)

WLCC for an existing building: a case study of facilities management cost modelling

220

(2)

Summary

222

(1)

References

222

(1)

Whole Life Costing of Building Assets Occupancy: a Case Study

223

(20)

Introduction

223

(1)

Sources of occupancy costs

223

(2)

Set-up costs

225

(1)

Non-controllable occupancy costs

226

(1)

Controllable occupancy costs

226

(1)

Disruption costs

227

(2)

Data and methodology

229

(5)

Results and analysis

234

(7)

Summary

241

(2)

References

241

(2)

Index

243

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Whole Life-Cycle Costing Risk and Risk Responses

Summary

Author Biography

Table of Contents

Supplemental Materials