Fauziah hanum binti Abdullah 51015960 BUILDING ECONOMICS AA! "15#$ COU!SE%O!

& # #0 ma'()$
*and+,ut dat*and+in dat. . #1)t N,/-mb-' #010 1#th D-1-mb-' #010

a) Explain the three fundamental problems with applying life-cycle costing in practice. b) Fundamental problem with applying life-cycle costing in practice. is to forecast long time ahead (say, 40 years from now) First, it is difficult to predict future cost of materials/components and labor. Future cost are less visible, as they are often hidden! within general operating expenses, but they can have significant impact on the future viability of an organi"ation. There could be technology changes that happen in the future that replace todays materials and/or components. Anything can happen in the future, such as war OR natural calamities that affect the building greatly, hence affecting the cost of repair/maintenance. #ome events can be predicted and therefore assessed. $thers are %ust impossible to forecast &ifferent types of clients have different emphasis on '.(.( Owner occupier ( !! "ery important. #eed to pay cost of maintenance, repair and refurbishment. To budget cash flow properly for the life span of the building$ Speculative Developer (e.g. build house for sale$ (#ot important at all, because the buyers will be responsible for maintenance etc.$ Build Buildings For rental (e.g. shopping complex) ( !! may be important because the building is still under the owners name and responsibility, e"en though some aspects of the maintenance (eg. %tility bill$ may be borne by the tenants. Complex process )n '(( analysis involves a large number of assumptions, some complex calculations and the ability to forecast costs often *0 years or more into the future.

+his high level of complexity is something that many ,uantity surveyors are simply not comfortable with and ma-es them bac- off from practicing '((. .erceived inaccuracy of results /t may be that within the industry '(( is deemed to produce relatively accurate results +his would be difficult to concur with, however, as it is unli-ely that one would go bac- and compare how accurate the forecast of whole life costs really was. +he perceived inaccuracy of an '(( analysis can be countered by underta-ing certain processes, such as ris- assessments and sensitivity analyses. +he use of ris- assessments reminds those reviewing an '(( analysis that there are inherent ris-s and that the final costs will never be exactly the same as the forecast #ensitivity analyses enable the surveyor underta-ing the exercise to test the parameters of the calculation to reduce the inaccuracies. Artificialit of the process $ne cannot avoid the fact that the process of '(( is artificial. 0hilst an '(( exercise may be ta-en seriously when it is first underta-en the reality of the situation is different when it comes to testing its relevance in the future. /f for example an '(( analysis is underta-en for an asset with a life of *0 years, once the actual costs are realised *0 years later it is unli-ely that anyone will go bac- and compare it with the original forecast costs. +he '(( process is less artificial when it is underta-en on components that have shorter life spans rather than on whole buildings. /t could be argued that '(( has more relevance for smaller scale analyses of components than for the analysis of a complete asset. 1educing the scope of '(( analyses to ma-e them more relevant could therefore result in increased usage levels. A!sence of a standardi"ed methodolog 2o specific method declared. &ifferent pro%ect different methods and understanding. +herefore to do analysis and differentiate with each pro%ect cannot be determined. it is necessary to set down consistent procedures to be used in life cycle costing if misallocations as a result of inconsistencies are to be avoided. Some of the methods by which consistency can be obtained in these assumptions can themselves lead to a misallocation of resources so that it is necessary to explore the means by which consistency in these areas can be achieved. Since the projections must be made under conditions of uncertainty, it is essentially that the methods by which risk analysis should be incorporated into life cycle costing.

b)

3our client is planning to build a 4 #tar 4otel and 1esort development by the seaside in .ulau 'ang-awi. )s the consultant )rchitect for the pro%ect, identify 5 (three) possible types of window (i.e types of material) that may be used for the pro%ect, and explain the implications of their use from 'ife (ycle (ost perspective.

Procedure for submission 1. !. ". students in a group Students are to use the standard form for assignment #ame and matriculation number must be clearly shown.