Lifecycle Cost Affordability and Performance-Based Contracting – A Managerial Decision Framework Based on Literature Review


  • Saba Pourreza1 (University of North Carolina Wilmington, USA)
  • Rebecca Scott1 (College of Business, New Mexico State University, USA)
  • Brian Sauser1 (University of North Texas, USA)

This manuscript reviews and synthesizes the product service system, lifecycle affordability, and performance-based contracting (PBC) literature across supply chain management, operations management, and logistics discipline. The study is based on 128 peer-reviewed articles published between 2005 and 2023 in journals related to the supply chain, logistics, and operations management field. The study proposes a framework for lifecycle affordability (LCA) and key aspects of performance-based strategy design and management, performance specification, and cost elements. This study is a robust literature review of lifecycle affordability and performance-based contracting. It proposes a framework to assist in business-to-business managerial decision-making to reduce lifecycle costs.

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