| Summary: | Life-cycle cost (LCC) is the much known method used for decision making that considers all costs in the life of a system or equipment. Predicting LCCs is fraught with potential errors, owing to the uncertainty in future events, future costs, interest rates, and even hidden costs. These uncertainties have a direct impact on the decision making. Activity based LCC is used to identify the activities and cost drivers in acquisition, operation and maintenance phase. This activity based LCC is integrated with fuzzy set theory and interval mathematics to model these uncertainties. Day–Stout–Warren (DSW) algorithm and the vertex method are then used to evaluate competing alternatives. A case of two pumps (Pump A and Pump B) are taken and their LCC is analysed using the developed model. The equivalent annual cost of Pump B is greater than Pump A, which leads the decision maker to choose Pump A over Pump B.
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