3 Simultaneously Considering Life‐Cycle Cost And Effectiveness For System Design Evaluation

Systems seek to satisfy identified needs and/or defined objectives. Effectiveness is the degree to which these needs or objectives are met. But need satisfaction incurs an aggregate cost to the user over the life cycle of the system. Therefore, both cost and effectiveness should be considered simultaneously during system design and development. In this paper, emphasis is placed on life-cycle cost analysis within the context of system effectiveness, both driven by Design Dependent Parameters. Our aim is to provide insight into the essential concepts and the process for considering both cost and effectiveness simultaneously, with a unique Design Evaluation Display as the centrepiece. development. There are many technical and managerial decisions and actions taken throughout the system life cycle. Most actions, particularly those in the early life-cycle phases, have significant implications and greatly affect life-cycle cost and system effectiveness. Accordingly, Cost-Effectiveness Analysis should be employed in the evaluation of alternative system design concepts and configurations, alternative production schemes, alternative logistic support policies, alternative disposal plans, etc. This analysis process is iterative in nature and can be applied to any phase of the system life cycle. The basic concepts inherent in Cost-Effectiveness Analysis are being applied to a broad range of problems in both the defence and the civilian sectors of public activities. More recently, CEA is finding a place in the design and development of systems for commercial and business applications worldwide. In all applications, the simultaneous consideration of life-cycle cost and effectiveness is an essential element in system design evaluation.