Utility Management Certification (UMC)

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When evaluating the purchase of a new pump, a utility manager who only considers the initial purchase price is ignoring the principles of Total Life Cycle Costing. Which of the following costs would be MOST significant in a comprehensive life cycle cost analysis?

The cost of the purchase order and initial shipping. The projected costs of energy consumption, routine maintenance, and eventual disposal over the asset's entire service life. The one-time cost for training staff on the new equipment. The administrative costs associated with the procurement process.

Correct Answer:

The projected costs of energy consumption, routine maintenance, and eventual disposal over the asset's entire service life.

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