Certified Maintenance & Reliability Professional (CMRP) Practice Exam

Which factor contributes to the majority of an asset's life cycle costs?

1. Initial purchase cost

2. Decommissioning costs

3. Operations and Maintenance costs

4. Replacement costs

The correct answer is: Operations and Maintenance costs

Operations and Maintenance costs contribute significantly to an asset's life cycle costs, often accounting for the largest portion of the total expenditure throughout the asset's lifespan. While the initial purchase cost is a considerable investment, the ongoing expenses associated with operating and maintaining the asset typically outweigh the upfront costs over time. This includes expenses related to labor, materials, inspections, repairs, maintenance activities, and utilities. The effectiveness of operations and maintenance can directly impact the asset's performance, reliability, and longevity, thus influencing the life cycle costs profoundly. Moreover, effective management of these costs is essential for enhancing overall asset reliability and performance, which is a key focus of maintenance and reliability professionals. Decommissioning costs, replacement costs, and the initial purchase cost, while important, do not generally represent the most considerable portion of the life cycle expenses compared to the ongoing operations and maintenance activities.