Levelized Function Cost: Economic Consideration for Design Concept Evaluation

  • Mariia KozlovaEmail author
  • Leonid Chechurin
  • Nikolai Efimov-Soini


Design concept selection lacks economic evaluation in the early stages of the design process. This chapter introduces the levelized function cost for express design evaluation, adapted from the power-generation sector. A single indicator represents all concept-related life-cycle costs per a unit of function produced, reflecting also the lifetime and productivity. The indicator allows comparing fundamentally different designs, and handles different sets of function objects. After a brief overview and comparison of potential indicators for economic assessment of design concepts, this chapter introduces the levelized function cost providing its derivation and definition, analyzes its sensitivity to the input variables, depicts the range of problems that can be addressed with the levelized function cost estimate, and finally illustrates its application in a flow meter design case.


Levelized cost Life-cycle cost New product design Design assessment Design selection 



The authors would like to acknowledge the support by Fortum Foundation (grant No. 201700063), the Finnish Strategic Research Council project “Manufacturing 4.0” (grant No. 313396), and TEKES, the Finnish Funding Agency for Innovation, and its program FiDiPro. We would also like to acknowledge the input of Prof. Mikael Collan from LUT School of Business and Management. He provoked and inspired the authors to bridge design and evaluation methods.


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Copyright information

© The Author(s) 2019

Authors and Affiliations

  • Mariia Kozlova
    • 1
    Email author
  • Leonid Chechurin
    • 1
  • Nikolai Efimov-Soini
    • 1
  1. 1.School of Business and ManagementLappeenranta University of TechnologyLappeenrantaFinland

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