Accounting & Marketing

Nisreen et al., J Account Mark 2015, 4:2

Medical Devices Service Life Cycle Cost Management in Al Karak Hospital
as a Case Study
Nisreen HJ1*, Salloom AJ1 and Omer NM2

1Industrial Engineering Systems Department, Mutah University, Jordan, Saudi Arabia
2Civil Engineering Department, Mutah University, Jordan, Saudi Arabia


This study implemented the concept of LCC to select between two alternative models from three different sets of medical devices, including two electrolyte models, two X-ray models and two infant incubator models as case studies. For LCC calculations, Kaufmann approach was used, which defines the operating profile, utilizing factor, the most critical cost parameters (i.e. failure rate and repair rate) and any related cost component (i.e. operating cost and maintenance cost). Our results showed that LCC could improve the range and quality of information available for decision-making when a comparison is performed between two alternatives. When comparing the annual LCC values for each two alternative models, the key effective cost categories affecting LCC were the consumable power cost and/ or consumables costs and the maintenance cost. Results showed that LCC and device age are linearly related indicating the increase of the cost to maintain the device in service by increasing the device age. Paired t-test showed significant differences between each two alternative models in annual LCC estimates. In this study, for the electrolyte devices (Model 2) displayed 25% lower annual LCC as compared with (Model 1). Higher annual LCC value (4.4%) was found for the X-ray device (Model 1) than ( Model 2) suggesting that (Model 2) is better alternative than (Model 1), even though foe the infant incubator devices (Model 2) has higher capital cost. The annual LCC estimate for (Model 1) was 5% lower than (Model 2) due to lower initial cost and maintenance cost. In conclusion, LCC analysis used in this study is vital for decision making for justifying certain model selection among a group of alternatives based on total costs rather than on the initial purchase price of a device.


Keywords: Medical devices; Life cycle cost; Net present value; Discounting back factor