Cost correlations equipment costs

Cost Indices In some cases, the cost of a piece of equipment is available from a previous study, and it is desirable to evaluate its present cost. Because of inflation and other economic changes, it is necessary to correlate equipment cost as a function of time. In this regard, cost indices are useful tools. A cost index is an indicator of how equipment cost varies over time. The ratio of cost indices at two different times provides an estimate for the extent of equipment-cost inflation between these two times. Hence,... 

Charts, correlations, and tables in the sources cited earlier relate capital costs to various parameters characteristic of the equipment to be evaluated. Table B.2 lists typical parameters used to correlate equipment costs for common types of process equipment. Figure B.3 is an example of such correlations for the cost of heat exchangers as a function of exchanger area. These forms of cost curves generally appear as nearly straight lines on log-log plots, indicating a power-law relationship between capital cost and capacity, with exponents typically ranging from 0.5 to 0.8. 

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 ... 

I. Oversimplification by correlating the cost of equipment in terms of a single variable... 

As an example of this technique, the estimated equipment costs for a large coal gasification project have been correlated and programmed for a computer. Thus, it is vei7 easy to get the cost of any one piece, or of many pieces of equipment, for a coal gasification or hydrocarbon processing project once the specification sheets are completed. 

Historical data on similar vessels and fractionation towers can best be used by correlating the costs of this equipment vs. weight. Many methods can be found in the literature for estimating the weight and costs of vessels and fractionators (References 8. 9, 10, and 11). Make sure the estimated weight is complete including skirt, ladders and platfonns, special internals, nozzles, and manholes. 

Correlation coefficient critical values (T) 842 Costs of equipment 11 Coulomb 504, 529 Coulometer 531... 

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.

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

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. 

The other references in this section all contain useful nomographs and correlations for the estimation of capital and equipment costs. 

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,... 

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. 

Some of the most reliable information on equipment costs can be found in the professional cost engineering literature. Correlations based on recent data are occasionally published in Cost Engineering, which is the journal of the Association for the Advancement of Cost Engineering International (AACE International). AACE... 

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