Fatigue strength dictates life and cost of welded structures and is often a direct result of initial manufacturing variations and defects. This paper addresses this coupling through proposing and applying the methodology of predictive life-cycle costing (PLCC) to evaluate a welded structure exhibiting manufacturing-induced variations in penetration depth. It is found that if a full-width crack is a fact, a 50% thicker design can result in life-cycle cost reductions of 60% due to reduced repair costs. The paper demonstrates the importance of incorporating manufacturing variations in an early design stage to ensure an overall minimized life-cycle cost.