Levelized Function Cost: Economic Consideration for Design Concept Evaluation

Abstract

Design concept selection lacks economic evaluation in the early stages of the design process. This chapter introduces the levelized function cost for express design evaluation, adapted from the power-generation sector. A single indicator represents all concept-related life-cycle costs per a unit of function produced, reflecting also the lifetime and productivity. The indicator allows comparing fundamentally different designs, and handles different sets of function objects. After a brief overview and comparison of potential indicators for economic assessment of design concepts, this chapter introduces the levelized function cost providing its derivation and definition, analyzes its sensitivity to the input variables, depicts the range of problems that can be addressed with the levelized function cost estimate, and finally illustrates its application in a flow meter design case.