Long-Term Replacement Planning
As the system works to develop Life Cycle Costing data on all the assets, there will be a point where the data will provide information on the costs of maintenance, repairs, and replacements for the assets. This information will be used to optimize the operation, maintenance, repair, rehabilitation, and replacement expenditures, which is the goal of Life Cycle Costing. However, the system does not have to wait for the database to be fully built out and the costs optimized to begin utilizing it.
As a system implements its asset management program, the available data can be used to begin developing long-term replacement plans. This allows the system to look at incomes and budgets and adjust in advance of a large expenditure or need.
To develop these long-term plans a system will want to develop a Capital Improvement Plan (CIP) and perform Business Case Evaluations. The CIPCapital Improvement Plan will allow the system to see what projects are needed when. The Business Case Evaluation allows the system to have a deeper look at high dollar projects to ensure projects are needed and that all the options for project development have been fully considered, including options for non-asset solutions or alternatives that might not include replacing the asset with a similar asset. This process allows the system to optimize construction funds.