Selecting the best alternative based on life-cycle cost distributions of alternatives

Abstract

Life-cycle cost (LCC) analysis can be used to select the best alternative among a set of candidates. The LCC is often treated as a random variable due to uncertainties. As a result, it is often represented by a distribution (or its first four moments) rather than a deterministic value. It is a challenge how to select the best alternative based on a set of given distributions. Mathematically, this deals with comparing magnitudes of the random variables representing the LCCs of alternatives. This paper develops an analytical framework to tackle this problem. The approach is illustrated by a numerical example.