Cost indexes

A number of sources of such data are available in the open literature. Unfortunately, the data to be used are often old, sometimes from a variety of sources, with different ages. Such data can be brought up to date and put on a common basis using cost indexes ... 

The most commonly used index is the chemical engineering plant cost index published in Chemical Engineering Magazine. 

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 ... 

The accuracy of such cost extrapolation tends to decrease with the length of time involved. Various important U.S. cost indexes are the M S Index, CE Plant Cost Index, Nelson Constmction Cost Index, and the ENR Constmction Index. Similar indexes are available for other countries. 

The Marshall and Swift (M S) Equipment Cost Index (6), formerly Marshall and Stevens, for installed equipment costs is pubHshed monthly in the ChemicalPngineering]om n. A. The indexes reported are the all-industries, process industries, and several specific industry indexes. The yearly all-industries index, given in Table 1, is based on 47 industrial categories. This is commonly used for the translation of purchased process equipment costs, even though... 

Year M S Equipment Cost Index CE Plant Cost Index... 

The CE Plant Cost Index (7) is also pubHshed monthly in the Chemical Engineering]omaci A. Index values are given for various categories of equipment, installation, labor, building, and supervision, as well as a composite plant cost index. The composite index for complete plant costs, tabulated in Table 1, is frequentiy used for the translation of purchased equipment costs, even though the equipment component of the index would be better. 

The ENR Constmction Cost Index, reported in the Engineering Nem Record, also weights constmction materials and labor. 

As an example, the battery-limits capital cost can be estimated for the production of 10,000 t/yr of ethylene (qv) from ethanol (11). Seven processing blocks, ie, vaporizer, reactor, water quench, compressor, dryer, distillation, and energy recovery, can be identified. The highest temperature is 350°C (reactor), and the highest pressure is about 1.7 MPa (17 atm) (compressor, two towers). If a materials-pressure factor, + of 1.03 is assumed, then for N = 7 0 = 0.87 1/0 = 1 64 and f =0 K = 6.3. This gives the 1981 cost as 4.4 X 10 . The 1991 battery-Hmits investment can be obtained, by updating with the CE Plant Cost Index, as 5.3 x 10 . ... 

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. 

Table 9-42 presents information on some cost indices for the United States. Engineering News-Record updates its construction-cost index in March, June, September, and December. The Oil and Gas Journal gives the Nelson-Farrar refinery indices in the first issue of each quarter. The Chemical Engineering plant-cost index and Marshall and Swift equipment-cost index are given in each issue of the pubhcation Chemical Engineering. Derivation of the base values is referred to in the respective publications. 

As indicated above, packed column internals include hqiiid distributors, packing support plates, redistributors (as needed), and holddown plates (to prevent movement of packing under flow conditions). Costs of these internals for columns with random packing are given in Fig. 14-80, based on early 1976 prices, and a Marshall and Swift cost index of 460. 

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. 

The usual estimating technique is to collect equipment pricing information from other projects and correlate this data by size, weight, pressure rating, and/or materials of construction. Each piece must be adjusted for inflation to bring all costs to one base time. Adjusting costs for inflation is discussed later under the heading, " Construction Cost Indexes. ... 

Several sources (References 19. 20, 21, and 22) are available for estimating pumps and drivers to check in-house coiTelations or to fill in w here data is not available. Care must be exercised in using construction cost indexes to update the literature data. It would be w ise to calibrate the indexes and literature data by getting vendor prices on a few of the larger, more expensive pumps, and 5% or 10% of the common types of pumps in the project being estimated. 

Once the cost of each piece of major equipment is known, it must be adjusted by construction cost indexes. Due to inflation and changing competitive situations, the price of equipment changes from year to year (Reference 26). Fortunately, there are several indexes that help in estimating today s costs based on historical data. Some of these indexes are Nelson Refinery Construction Cost... 

Nelson Construction and Operating Cost Indexes, Oil and Gas Journal, First issue each month. 

However, in general these fabrication and performance advantages are common to all plastics and so a decision has to be made in regard to which plastic would be best for a particular application. Rather than compare the basic raw material costs it is better to use a cost index on the basis of the cost to achieve a certain performance. Consider again the material selection procedures illustrated in Section 1.4.1 in relation to strength and stiffness. 

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,... 

Various cost indices are published regularly. A conunonly used index is the Marshall and Swift (M S) equipment cost index published in the monthly magazine Chemical Engineering. For atmospheric pollution control equipment, the Vatavuk cost index may be used (Vatavuk, 1995). It is not recommended to use cost indices if the updating period exceeds ten years. 

Equivalent Social Cost index Fatal accident rate (discussed in Section 18.5) ... 

Chemical Engineering Plant Cost Index [42]. Probably the most commonly used cost adjusting index printed/updated monthly is in Chemical Engineering Magazine send has established continuity over many years. Its breakdo vn component costs apply to plants and plant equipment/systems. 

Marshall and Swift Equipment Cost Index [57]. Commonly used for process industry equipment and index numbers presented by industries in Chemical Engineering Magazine on a monthly basis. 

Chemical Engineering Plant Cost Index and Marshall and Sivift (M S) Equipment Cost Index appear regularly in Chem.ical Engineeiing. 

Marshall Swift Equipment Cost Index, Chem. Engr., McGraw Hill Publishing Co. Published regularly in specific issues. 

Floor treatment/flooring Comparative cost index... 

Plastic Cost index Yield strength index Impact strength index... 

Alloy Designation Tensile Strength 0.2% Yield Working Hardness Coeff. of Thermal Expansion Thermal Conductivity Cost Index... 

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