The objective of this paper is to provide a model for effective implementation of costing RAM management in the design and procurement of production facility considering the system cost-performance trade-off. This research proposes a two-step approach of costing RAM design and test of system RAM for production facility. In Step 1, a static model is proposed to find an initial system configuration to meet the required performance based on system RAM and LCC and analyzes the trade-off relationships between various factors of RAM and LCC. In the second Step, we developed time and failure truncated models for system reliability test and analysis. For the computational purpose, we developed computer programs and have shown the sample results. By the sample test run, the proposed model has shown the possibilities to provide a good method to analyze system performance evaluation for both design and operational phase, This model can be applied to a wide variety of systems not only for costing RAM of the production facilities but also for the other kinds of equipment.