Asset Lifecycle Management Flashcards

A utility is comparing two pump options: Pump A costs less to buy but uses more energy, while Pump B costs more upfront but has lower operating costs. Which approach best supports the decision?

Answer: Compare whole-life costs, including acquisition, operation, maintenance, and disposal

Whole-life (life cycle) costing captures all costs over the asset's life, so it shows the true economic choice between options.

In life cycle costing, why are future costs usually discounted to present value?

Answer: To account for the time value of money when comparing options with different cost profiles

Discounting converts cash flows at different times into a common present-value basis so alternatives can be compared fairly.

At which lifecycle stage does an organization typically have the greatest ability to influence an asset's total life cycle cost?

Answer: Concept and design

Most whole-life costs are locked in by decisions made during concept and design, before the asset is built.

Which activity is most closely tied to the 'create/acquire' stage of the asset lifecycle?

Answer: Commissioning and handover to operations

Commissioning and handover confirm that a newly created or acquired asset performs as specified before operation begins.

An asset's economic life ends when:

Answer: The cost of keeping it in service exceeds the cost of replacing it with an alternative

Economic life ends when the equivalent annual cost of keeping the asset is higher than that of a replacement.

Why should operations and maintenance staff be involved during the design of a new asset?

Answer: To build in maintainability, operability, and lessons learned from existing assets

Early input from operations and maintenance improves maintainability and operability and lowers whole-life cost.

What is the main purpose of an asset handover package at the end of a capital project?

Answer: To give operations the information it needs, such as drawings, manuals, spares lists, and asset register data

A full handover package makes sure the asset can be operated, maintained, and recorded properly from day one.