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Assignment Aleki

The document discusses life cycle costing and its components including acquisition, operating, maintenance and disposal costs. It also provides details on regulations regarding manner of inspections of buildings, reporting inspection results, implementing repair work, and offences and penalties.

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Leo Giddy
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17 views

Assignment Aleki

The document discusses life cycle costing and its components including acquisition, operating, maintenance and disposal costs. It also provides details on regulations regarding manner of inspections of buildings, reporting inspection results, implementing repair work, and offences and penalties.

Uploaded by

Leo Giddy
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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DEPARTMENT OF CONSTRUCTION MANAGEMENT AND ECONOMICS

FACILITY MANAGEMENT

ASSIGNMENT

EACR/01831/2017

ALEX WACHIRA

JULY 2021
QUESTION 1

Life cycle costing is a tool to be used in the decision-making process, the objective being to ensure the
best value for money over the economic lifespan of the asset with the time value of money being
taken into account. It is also known as whole life-cycle costing, cost-in use, engineering economics,
cost-benefit study or terotechnology. With aid of examples demonstrate how life cycle costing can be
used to inform an investor on choice of alternative building elements or materials. (10 Marks)

Acquisition Cost

This is the initial cost or also known as capital cost. It is a cost outlay, which is required in order to
put a system or an asset into service to benefit the users. It includes all the costs required to implement
a project or to run an asset. Acquisition cost can be broken down into purchase price, installation cost,
training cost, conversion cost and transportation cost.
Operating Cost
Operating cost is the cost required to operate a system or an asset during its useful life. It might
probable be two to three times higher than the acquisition cost. In life cycle cost analysis, operating
cost is usually a future cost which is unknown, especially for newly developed assets, where
assumption and forecast are needed in estimating the cost. Generally, operating cost can be broken
down into direct labour cost, utilities cost, spare parts maintenance cost, custodial cost, insurance and
rental.

Maintenance Cost
Maintenance cost is the cost required in maintaining a system or an asset when the system or asset
breaks down during its useful life. Similar to operating cost, it is also an unknown cost data for newly
developed asset as it is the future cost outlays and assumption is required. The maintenance cost is
divided into two categories which are scheduled maintenance cost and unscheduled maintenance cost.

Maintenance cost can further be broken down into preventive maintenance cost, reactive maintenance
cost, custodial cost, material cost, labour cost and cost of repair.

Disposal Cost

Disposal cost or also known as residual value is also a future cost and it is often difficult to

estimate. It is the cost used in disposing or getting rid of the asset after the end of its useful life.
However, sometimes disposal cost also known as salvage value if the asset could be sold as a second
hand product and gain some cost from it. Thus, disposal cost could be broken down into salvage
value, removal cost, conversion cost, cleaning of site and waste disposal.

2. Briefly discuss what is provided for in the regulations under the following: (10 marks)

i. Manner of inspections of buildings

 That in every five years maintenance manual must be reviewed because after this time
maintenance and repairs needs to have been done.
 They also need to undertake a performance progress audit, This is by checking the
building maintenance manuals, drawings and maintenance plan.
 It is important to inspect the buildings periodically so that you can check whether its
still safe for use.
 Occupational certificates shall be issued upon completion of a building and be
renewed thereafter every five years upon inspection.

ii. Report of the results of an inspection

 Survey and performance audit forms an integral part in the planning and execution of
building maintenance and must be provided in the report.
 To adequately undertake a survey and performance audit the choice and application of
various tools is fundamental. These include among others; Building maintenance
manuals, drawings and maintenance plans.
 The user is critical in generating feedback information on the performance of the
building. There shall be efforts to collect and incorporate feedback from the user.
 Appropriate institutional structures shall be put in place to ensure wide application
and monitoring of harmonized survey and performance audit tools to meet laid down
standards.

iii. Implementation of repair work

 You have to come up with appropriate legislation to govern and regulate maintenance
practice.
 The Survey and audit tools shall be developed, reviewed, updated, popularized and
widely shared in the light of emerging trends and best practices.
 Also, the design team shall prepare a maintenance manual for any new building
before handing over.

iv. Offences and penalties.

The following are some of the main offences:

 The quality of material used during construction being below minimum acceptable
standard.
 Having a gap in the maintenance professionals.

The owner of the structure shall face the penalties as stated in Sessional Paper No. 2 of
the 2015 National Building Maintenance Policy.

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