Four Factors to Consider when Calculating Life Cycle Cost

by | Jan 12, 2016 | Uncategorized

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When the need arises to replace an existing air compressor or to purchase an air compressor for a new facility or application, one should consider several factors before making the purchase. Aside from space requirements, flow capacities, noise levels, and other application-based parameters, a major factor that should also be considered is total life cycle cost.

Here are four factors to consider when calculating the total life cycle cost of a new compressor:

  1. Total Purchase Price – The total purchase price is usually just a small part of the total life cycle cost. It’s important to note that just because a compressor might have a much lower purchase price, that does not mean it will cost less over its lifetime.
  2. Installation Costs – Installation costs may include electrical wiring, air and water piping, and foundation requirements, among other costs. These costs can vary depending on the type and model of compressor being selected.
  3. Maintenance Costs – Maintenance costs can vary greatly. They include both labor and parts required to not only keep the compressor running, but to keep up with required maintenance schedules. Different manufacturers have different recommended service intervals and component lifetimes, which can have a huge impact on how much money is spent to maintain the compressor over its lifetime.
  4. Energy Efficiency – The energy efficiency of a compressor could potentially save tens of thousands of dollars annually on the electrical costs to operate the unit. Such savings can pay back the purchase price difference in a matter of months, not to mention the savings will be ongoing. It is possible that by the end of a compressor’s life the energy savings will have paid back the entire purchase price of the compressor.

While there are many factors to consider when purchasing a new compressor, choosing a compressor with the lowest life cycle cost can have the biggest impact on your company’s bottom line. If you’d like to learn more about calculating life cycle cost, fill out our Request a Quote form and a representative will be in touch with you shortly. You may also enjoy the following articles:

Source: Compressed Air Blog