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Design for X 379

able to contribute substantially to sustainability in many design appli-
cations. With companies concerned with short-term versus the long-term
benefits, and until there is widespread use and mass marketing of these
designs, commercial environmentally friendly designs will probably con-
tinue to be a conversation piece rather than a routine practice.
In addressing the question of whether DFE will be lucrative in a
given DFSS project, it is imperative to consider designs that are opti-
mal relative to other components in which they are used, specifically,
datum technologies. Economic evaluation is required both for maxi-
mum economic benefit and to estimate what the expected dollar sav-
ings (or losses) will be. The major purpose of using economic analysis
techniques is to consider environment concerns and profit concerns
jointly in an attempt to reduce the use of nonrenewable energy and
maximize recyclability. These techniques usually clarify the financial
value of limiting nonrenewable energy use.
The actual financial value of any proposed solution can easily be eval-
uated according to the established economic criteria for the project. For
example, solar economics deals with optimizing the trade-off between
solar system ownership and operating costs and the future cost of the
fuel saved by the solar system during its anticipated useful life. Life-cycle
cost (LCC) is a term commonly used to describe a general method of eco-
nomic evaluation by which all relevant costs over the life of a project are
accounted for when determining the economic efficiency of a project. Life-
cycle cost requires assessment of the following types of related costs:

1. System acquisition and installation costs (capital costs)
2. System replacement costs
3. Maintenance and repair costs
4. Operation cost (e.g., energy costs)
5. Salvage or resale value net of removal and disposal costs
A life-cycle costing approach can be implemented by applying any or
all of the following evaluation techniques:

1. Total life-cycle-cost (TLCC) analysis, which sums the discounted
value of all the equivalent costs over the time horizon.
2. Net present worth (NPW) analysis, which calculates the difference
between the TLCC of a proposed project and its alternative as a dollar
measure of the project’s net profitability.
3. Internal rate of return (IRR) technique, which gives the percentage
yield on an investment. (See Bussey 1998).
4. Activity-based costing (ABC) with or without uncertainty measures.
(See Sec. 10.7.)