Australian LCC

Australian MUSIC v5 Life Cycle Costing

The design of the life cycle costing module in the Australian version of MUSIC is based on the Australian standard for life cycle costing (AS/NZS 4536:1999).

The module uses algorithms and estimates to predict cost elements given information about a stormwater treatment device’s size (i.e. size attributes). These ‘cost / size’ relationships are based on real data collected from around Australia in 2002-04. Statistical tests have been undertaken on these relationships to allow users to choose between an expected estimate (default option), an upper estimate or a lower estimate. In addition, users have the option of entering a user-defined value for all cost elements and other variables in the life cycle costing analysis (e.g. the real discount rate, life cycle, annual interest rate, base date and span of analysis).

When estimates have been chosen for all cost elements, as well as a life cycle, a base date for costing, an annual inflation rate and a real discount rate for an individual stormwater treatment measure, MUSIC calculates its life cycle cost by adding all of the discounted real costs that are likely to be incurred over the treatment device’s life cycle. MUSIC also calculates an equivalent annual payment (i.e. the life cycle cost divided by the number of years in the device’s life cycle) as well as the equivalent annual payment per kilogram of pollutants (i.e. TSS, TN, TP and gross pollutants) that are trapped each year.

For stormwater treatment trains, MUSIC allows users to set a ‘span of analysis’ which is the timeframe over which the life cycle costing analysis will be done, and is usually set at the longest life cycle of any treatment device in the treatment train. Once this is done, MUSIC calculates the life cycle cost of each treatment device in the train using the same timeframe (i.e. the span of analysis). MUSIC then adds the life cycle costs of all of the stormwater treatment devices in the treatment train to estimate the life cycle cost of the treatment train. Users can undertake a life cycle costing analysis at any point in the treatment train (i.e. the analysis can incorporate some or all of the treatment devices in the train).

MUSIC also allows users to easily generate and export:

Relative cost distribution graphs that show the relative contribution of each cost element to the life cycle cost of the treatment measure or treatment train (for real and discounted real costs).

A temporal cost distribution graph that shows when costs are incurred over the life cycle of the treatment measure or treatment train (for real and discounted real costs).

A sensitivity analysis graph that shows how the predicted life cycle cost of the treatment measure or treatment train varies depending on the choice of real discount rate (i.e. the selected rate ± 1% and ± 2%).

For more information on life cycle costing methodology, refer to Taylor (2003) and/or Standards Australia (1999).The design of the life cycle costing module in MUSIC is based on the Australian standard for life cycle costing (AS/NZS 4536:1999).