Alternative Equipment Purchases

In the present worth technique, all of the costs and revenues are discounted to calculate the present worth of each alternative. Note that it is crucial to compare the alternatives over the same time period. This approach is illustrated in Example 17.24, in which diagrams show the projected costs and the recovery of the salvage values in time. 

Two alternative pumps, A (carbon steel) and B (aluminum), have different installed and maintenance costs, salvage values, and anticipated service lives, as indicated below. It is desired to select one of the 

When discounting the costs and salvage values, the maintenance costs can be treated as an annuity, computed using Eq. (17.32) with i = 0.10 and n = 6, because the cost is periodic and constant at 

Although pump B has the higher installation cost, it is selected because its present worth is lower than pump A.  

When comparing alternatives, the equipment item having the lowest capitalized cost is selected. 

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Users of this International Standard should be aware that further or differing requirements may be needed for individual applications. This International Standard is not intended to inhibit a vendor from offering, or the purchaser from accepting alternative equipment or engineering solutions for the individual application. This may be particularly appropriate where there is innovative or developing technology. Where an alternative is offered, the vendor should identify any variations from this International Standard and provide details. 

For example, if vehicle brake maintenance results in the most injuries, you may want to purchase alternate equipment or invest in additional employee training. 

A variety of tools — including product selectors and cost calculators — are available online for 24/7 access to help safety professionals and equipment purchasers select the right PPE for each specific need Objectives are established by users identifying the hazard type that best fits their protection needs, such as bloodbome pathogen protection, chemical resistance, pandemic preparation and other alternatives. This data is the result of the hazard analysis and risk assessment discussed earlier. 

There can be an element of maintenance costs that is fixed and an element which is variable. Fixed maintenance costs cover routine maintenance such as regular maintenance on safety valves which must be carried out irrespective of the rate of production. There also can be an element of maintenance costs which is variable. This arises from the fact that certain items of equipment can need more maintenance as the production rate increases. Also, royalties which cover the cost of purchasing another company s process technology may have different bases. Royalties may be a variable cost, since they can sometimes be paid in proportion to the rate of production. Alternatively, the royalty might be a single-sum payment at the beginning of the project. In this case, the single-sum payment will become part of the project s capital investment. As such, it will be included in the annual capital repayment, and this becomes part of the fixed cost. 

The level of design less accuracy is obviously needed for rough scouting calculations, made to sort out possible alternative designs, than in the final stages of design when money will be committed to purchase equipment, and for construction. 

Distance is a major factor in reducing nuisance noise and suitable spacing should be considered in the plant initial layout. The acceptable amount of noise generation should be specified on the purchase order for the equipment. Where sound levels cannot be alleviated by purchasing a different make of equipment, sound attenuation devices should be fitted (i.e., enclosures) as an alternative. 

Net Present Worth Method The NPW method allows the conversion of all money flows to be discounted to the present time. Appropriate interest factors are applied depending on how and when the cash flow enters a venture. They may be instantaneous, as in the purchase of capital equipment, or uniform, as in operating expenses. The alternative with the more positive NPW is the one to be preferred. In some instances, the alternatives may have different lives so the cost analysis must be for the least common multiple number of years. For example, if alternative A has a 2-year life and alternative B has a 3-year hfe, then 6 years is the least common multiple. The rate of return, capitalized cost, cash flow, and uniform annual cost methods avoid this complication. 

The choice of appropriate equipment often is influenced by considerations of price. A lower efficiency or a shorter life may be compensated for by a lower price. Funds may be low at the time of purchase and expected to be more abundant later, or the economic life of the process is expected to be limited. Alternate kinds of equipment for the same service may need to be considered water-cooled exchangers vs. air coolers, concrete cooling towers vs. redwood, filters vs. centrifuges, pneumatic conveyors vs. screw or bucket elevators, and so on. 

Capitalized cost related to investment represents the amount of money that must be available initially to purchase the equipment and simultaneously provide sufficient funds for interest accumulation to permit perpetual replacement of the equipment. If only one portion of an overall process to accomplish a set objective is involved and operating costs do not vary, then the alternative giving the least capitalized cost would be the desirable economic choice. 

SPPS can be performed in classical glass reaction vessels that can be made by glassblowers or purchased from manufacturers (Fig. 1). Alternatively, syringes equipped with PTFE or glass frits may also be used. 

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