Cost correlations

SPC on manufactured products SQC on laboratory operations communicate with corporate CIM system improved QA/QC on products reduced testing costs correlate laboratory analyses and process measurements faster solutions to production problems tested in laboratory faster notification of backlog problems improved electronic data interchange capabiUties automated communication with inventory, ordering, and materials planning systems... 

Equipment Costs. Equipment costs include the purchased cost of process and materials handling equipment, storage faciUties, waste treatment equipment, stmctures, and site service faciUties. Installation costs such as insulation, piping, painting and finishing, foundations, process stmctures, instmmentation, and electrical service connections are estimated or factored separately. Actual quoted prices from suppHers are the best data, but these are not usually available when estimates are made. The quick, inexpensive cost estimates are based largely on personal cost files, internal company cost data, or pubUshed cost correlations. 

Exponential cost correlations have been developed for individual items of equipment. Care must be taken in determining whether the cost of the eqmpment has been expressed as free on Board (FOB), delivered (DEL), or installed (INST), as this is not always clearly stated. In many cases the cost must be correlated in terms of parameters related to capacity such as surface area for heat exchangers or power for grinding equipment. There are four main sources of error in such cost correlations ... 

Water Systems These systems usually form the third highest cost item in chemical-plant anxiharies, with cooling towers representing the largest part of the investment. Although the installed cost increases with the terminal temperature range, an approximate cost correlation is given by... 

The driver on centrifugal compressors should be correlated separately. The difference in the initial cost of an electric motor and gas turbine would overshadow the cost correlation of compressors. Literature data can be found in Reference 25. 

The volume of the closest standard stirred tanks are 1.0 and 1.6 m while a tray drier of 0.3 m can be assumed standard. The total volume of the equipment is now 3.9 ml Thus, adding one reactor for stage I the total volume decreases from 4.6 m to 3.90 m. Depending on cost correlations for all units the economics of both arrangements can be assessed. 

Table 2.1 Typical equipment capacity delivered capital cost correlations.

Cost correlations for vessels are normally expressed in terms of the mass of the vessel. This means that not only a preliminary sizing of the vessel is required but also a preliminary assessment of the mechanical design9,10. 

If the capital cost of new heat transfer area is expressed in the form of Equation 18.6, then this will lead to poor retrofit projects. The problem with Equation 18.6 is that the optimization is likely to spread the new heat transfer area in the network in many locations, without incurring a cost penalty associated with the many modifications that would result. To ensure that new heat transfer area is not spread around throughout the existing heat exchanger network, a capital cost correlation should be used that is of the form ... 

Figure 26.53 presents a superstructure for the design of an effluent treatment system involving three effluent streams and three treatment processes17. The superstructure allows for all possibilities. Any stream can go to any effluent process and potential bypassing options have been included. Also, the connections toward the bottom of the superstructure allow for the sequence of the treatment processes to be changed. To optimize such a superstructure requires a mathematical model to be developed for the various material balances for the system and costing correlations included. Such a model then allows... 

M Constant in capital cost correlations (-), or molar mass (kg kmol-1)... 

Empirical cost correlations for equipment are often of the following form ... 

Cost-benefit analyses, 24 189 for immunizations, 25 506-507 Cost correlations, 9 526 Cost estimation, 9 526-534. 

All eleven references in this category relate directly to Section 6.1, the Economic Evaluation of this project. They contain capital costing methods, cost correlations, typical plant and equipment costs, and economic indicators to account for cost changes with time. 

Cost correlations provide a convenient method of estimating the capital cost of major items of equipment. Correlations are usually provided graphically as plots (log-log coordinates) of capital cost of a particular item versus capacity (e.g. volume, surface area, throughput, or power rating). Even at zero capacity, there is some cost (e.g. overheads) associated with the equipment. The cost (C) increases to infinity (i.e. slope of the curve = I), at which point it is more economic to use multiple units of the same size. For an intermediate capacity (Q) range,... 

Cost Estimates - Plant investment costs were developed using cost correlations based on actual plants constructed by Standard Oil Company of California. The important bases for these estimates are summarized in Table XVIII. Costs for the overall Case 1 refinery are broken down and detailed in Table XIX. Investments are categorized as "onplot," those directly concerned with the individual refinery process plants, and "offplot," for auxiliary or supporting facilities, such as utility plants, tankage, etc. The estimating allowances shown... 

Cost correlations based on actual plants constructed by Standard Oil Company of California from the 1960 s through mid-1970 s. In addition to adjustments for inflation, size and known differences in plant location, the base estimates include allowances for ... 

The synthesis starts with a single specified feed and a list of acceptable process output streams. It also starts with a list of possible unit transformations. The units are defined by conditions which must be met by the input streams and limitations which describe the outputs in terms of inputs. No more than two input or two output streams are allowed for a unit. A crude cost correlation is also required for each unit. 

Optimize the distillation column using the cost correlations given in Section 6.3 and assuming that reboiler heat costs 5/MMBtu. Minimize the total annualized cost of the column. 

Other costs can be estimated using the cost correlations given in ection 6.3. 

From Table 6.2, the cost correlation for the Axens process for benzene saturation gives C = 0.0061(5)° ... 

There is an abundance of equipment cost data and cost correlations in the open literature, but much of it is of very poor quality. The relationship between size and cost given in equations 6.6 and 6.7 can also be used for equipment if a suitable size parameter is used. If the size range spans several orders of magnitude, then log-log plots usually give a better representation of the relationship than simple equations. 

Note that the pumps and drivers are at the lower end of the range of validity of the cost correlations, but their costs are small compared to the other costs, and the error introduced is therefore negligible given the overall accuracy of +30%. 

It is difficult for engineers outside the EPC sector to collect recent cost data from a large set of real projects and maintain accurate and up-to-date cost correlations. Instead, the most common method for making preliminary estimates in industry is to use commercial cost-estimating software. 

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