Michigan State University
OP-16: Life Cycle Cost Analysis

Excerpt from MSU Purchasing Policies and Procedures Manual: 21. Environmentally Sustainable Procurement-as stewards for the university, the buyer has an obligation to consider all aspects of a procurement decision. Total Cost of Ownership analyses are to be used as an evaluative tool in measuring the total impact of a procurement decision, particularly those of high impact or high dollar volume. While not an exhaustive listing, the following are considerations for buy decisions as determined applicable by the buyer: A. Product factors such as recycled, remanufactured or re-used content in products. B. When procuring equipment considering all aspects of the use of the equipment including the cost of the equipment, the operating expenses including electricity, steam, water, supplies factored over the useful life of the equipment. C. Procuring environmentally certified products such as Energy Star, Forest Stewardship Council certified, etc. D. Disposal costs of goods and equipment or waste produced through utilization. E. Alternative service delivery options such as remote diagnostics. F. Modifications to packaging to reduce downstream waste. G. Consideration of the reduction of multiple product use when replaced by a single product and the cost implications of such a decision. H. Teleconference options as compared to face to face meetings requiring air and/or vehicle travel. I. Locally produced/locally grown reducing transportation costs and impacts. J. Shipment consolidation to reduce environmental impact and cost to the university community.