Cost Data

Heat exchanger cost data usually can be manipulated such that the fixed costs, represented by the coefficient a in Eq. (7.20), do not vary with exchanger specification. If this is done, then Eq. (7.6), as derived in App. F, can be modified to ... 

Equipment costs may be obtained from equipment vendors or published cost data. Published cost data are usually presented as cost versus capacity charts or expressed as a power law of capacity ... 

Table 3. Owning and Operating Cost Data and Summary ...

Means Mechanical Cost Data, R. S. Means Co., Kingston, Mass., 1992. 

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. 

Time Translation of Cost Data. Cost data for any particular point in time can be corrected to the present or any other time by means of cost indexes in the relation ... 

Order-of-Magnitude Estimates. Unit capital cost data (dollars per aimual ton of product) are occasionally reported for chemical plants. These data can be multiphed by a selected plant capacity to estimate a capital cost. This is, however, feasible only if the reference process, conditions, and capacity are similar. 

Unit cost data should be carefully assessed to ensure that process type, size, and raw materials are similar to the proposed venture. Operating cost data sometimes are reported for separate categories such as operating labor, maintenance labor, supervision, and utiHties (9). 

In general, cost data will be available for multiple units. Typically, the cost of production for 1 week or of a specific order is computed and an average cost per unit obtained. This average value Y for the batch should be plotted against the corresponding learning-cuive value X calculated oy Eq. (9-66) ... 

Let us consider the overhead-cost data for Table 9-39 with 10 million kg per month as the standard production rate. The static budgeted overhead is then 150,000 per month, or 1.5 cents per kilogram. We assume that the actual overhead is 186,000 for a month in which 12 milhon kg was produced. Then, the static budgeted overhead cost would be 12 million(I.5), or 180,000 per month. Therefore, the variance is 186,000 — 180,000 = -t- 6000, which is unfavorable because 6000 more was spent than was anticipated. 

Actual Costs versus Standard Costs Let us consider the sales, profits, and manufacduring-cost data in Table 9-40. The gross profit is 33,129 per period better than e)mected. Clearly, there is less incentive to investigate overall costs when the profit variance is favorable than if the profit were less than expected. However, standard costing enables an objective analysis of the data, whether good or bad, to be made. 

Cost Indices The value of money will change because of inflation and deflation. Hence cost data can be accurate only at the time when they are obtained and soon go out of date. Data from cost records of equipment and projects purchased in the past may be converted to present-day values by means of a cost index. The present cost of the item is found by multiplying the historical cost by the ratio of the present cost index divided oy the index applicable at the previous date. Ideally each cost item affected by inflation should be forecast separately. Labor costs, construction costs, raw-materials and energy prices, and product prices all change at different rates. Composite indices are derived by adding weighted fractions of the component indices. Most cost indices represent national averages, and local values may differ considerably. 

The first stage toward producing an accurate estimate is to use a standard cost code for all construction projects. Table 9-45 shows a suitable numerical cost code, and Table 9-46 shows a typical alphabetical-numerical code. The cost-code system can be used throughout the estimating and construction stages for the collection of cost data by manual or computer methods. There are numerous types of fixed-capital-cost estimates, but in 1958 the American Association of Cost Engineers defined five types as follows ... 

Order-of-magnitude estimate (ratio estimate). Rule-of-thumb method based on cost data for previous similar types of plant probable error within 10 to 50 percent. 

Greater accuracy of estimation may be achieved, within limits, by the expenditure of more time and money. The greater the accuracy required, the greater the time and effort needed to obtain the design and cost data prior to making the estimate. 

TABLE 9-48 Capital-Cost Data for Processing Plants ... 

Exponential Methods Rapid capital-cost estimates can be made by using capacity-ratio exponents based on existing cost data of a company or drawn from pubhshed correlations. 

Cost data for shell-and-tube exchangers from 15 sources were correlated and found to be consistent wrien scaled by the Marshall and Swift index [Woods et al., Can. J. Chem. Eng., 54, 469-489 (December 1976)]. 

Operating-cost data for these units are meager. Power costs may be estimated by assuming 1 hpper cylinder for diameters of 1.2 to 1.8 m (4 to 6 ft). Data on labor and maintenance costs are also lacking. 

Performance and Cost Data for Continuous Tunnel Dryers. 12-48... 

Cost Data for Kilns Purchase prices, weights, and horsepower requirements of typical units are given in Table 12-21. Installed costs will run to from 300 to 500 percent of purchase cost. Maintenance will average 5 to 10 percent of the total installed cost per year but is dependent largely on the hfe of the refractoiy lining. 

Performance and Cost Data for Indirect-Heat Rotary Steam-Tube Dryers Table 12-22 contains data for a number of standard sizes of steam-tube diyers. Prices tabulated are for ordinaiy carbon steel construction. Installed costs will run from 150 to 300 percent of purchase cost. 

Performance and Cost Data for Batch Vacuum Rotary Dryers Typical performance data for vacuum rotaiy diyers are given in Table 12-26. Size and cost data for rotaiy agitator units are given in Table 12-27. Data for double-cone units are in Table 12-28. 

Performance and Cost Data for Turbo-Tray Dryers Performance data for three apphcations of closed-circuit diying are included in Table 12-29. Operating, labor, and maintenance costs compare favorably with those of direct-heat rotating eqmpment. 

Figure 14-81 provides early 1990 cost data for the shell and heads, and Fig. 14-82 provides 1990 cost data for connections. For very approximate estimates of complete columns, including internals, Fig. 14-83 may be used. As for Figs. 14-81 and 14-82, the cost index is 904. 

SiphonSizers vaiy so widely in configuration that general cost data are not meaningful. 

The electrochemical protection of chemical plants is a question of customizing and therefore no universally applicable cost data can be established. Since chemical equipment and the materials used in its construction are proportionately more expensive and frequently other protection methods give no absolute guaran-... 

Micro-scaling or bottom up approach to quality costs, where it is possible to calculate the cost of losses involved in manufacture and due to returns and/or claims. This method requires a great deal of experience and relies on the availability of detailed cost data throughout a product s life-cycle. While this is a crucial activity for a business, it is also not a practical approach for estimating the quality cost for product in the early stages of product development. 

All cost estimates are based on historical costs accumulated from previous projects. This history can be in-house, from vendors, or from the literature. The accuracy of an estimate depends on how completely the project is defined, and on how well the costs from previous projects have been analyzed and correlated. If your company does not have good (or any) past project records, the literature abounds with correlations of cost data, as discussed later. However, this data must be used very carefully. 

As an example of coirelating plant costs, the cost data from a nylon intermediate plant constructed from stainless steel was accumulated and converted to factors as shown in Table 2. 

This equipment presents problems in estimating preliminary costs, since there is seldom enough information in-house to make good correlations. Vendors are by far the best source of costs. Guthrie (Reference 23) discusses the complexities of estimating high-pressure equipment and presents some cost data. 

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