Costing and economic analysis

The methodology recommends to cost the pavement structure determined and also to carry out an economic analysis among alternative pavements using different materials. Stage construction may also be selected. For more information, see AASHTO (1993). 

---

Fabrycky J.W. and Blanchard, B.S. (1991) Life-Cyde Cost and Economic Analysis, Prentice Hall, Englewood ClilFs, NJ. 

A proper cost and economic analysis can only be made after all the invited manufacturers have fully complied with the details of the enquiry specification. The engineer must satisfy himself that this requirement has been properly met, otherwise a low bid price may indicate non-compliance or poor understanding of the enquiry specification. Apart from the important technical requirements there are often other engineering considerations that should be taken into account, e.g. vendor documentation, spare parts, delivery schedule, obsolescence, testing and inspection. Some of these aspects have a definite cost impact whereas some are somewhat intangible, e.g. history of performance, delivery schedule, obsolescence. 

Operating Cost and Economic Analysis. This section begins with a presentation of the annual costs of operating the proposed plant, that is, the cost sheet, as discussed in Section 17.2 and shown in Table 17.1. In addition to the total production cost on the cost sheet, it should provide an estimate of the cost per unit weight of the product (e.g., per lb, kg, ton, or tonne). Note that when cash flows are computed for different production rates from year to year, a separate cost sheet is required for each unique production rate. Note also that, in addition to appearing on the cost sheet, the utilities for each equipment unit and their costs should be sununarized in a separate table. 

Fabrycky W, Blanchard B (1991) Life-cycle cost and economic analysis. Prentice-Hall, Inc., New Jersey, Chap 1, p 13... 

Economic analysis/valuation of specific functions or services provided by the natural system (i.e. the ecosystem) and of the (societal) costs and benefits of the measures proposed to restore these services, contributes to the transparency of the decisions. Concerning the system, a better definition of water services is needed in order to evaluate recovery costs of water uses and environmental costs. The economic analysis should also include a valuation of water and ecosystem services. For instance, the delivery of clean water by the ecosystem (e.g. through its filtering capacity or capacity to degrade contaminants) is one of these services. 

Performs a cost and benefit analysis study on the project (feasibility in technical and economic respects). 

A rigorous assessment of the costs and benefits of setting a standard will be necessary for standards that are to be legally binding and could have serious cost implications. However, standards that are advisory or provisional will require less detailed social and economic analysis. There is certainly more leeway in examining the costs to industry of complying with a standard that it is not obliged to meet. 

If the consequences of setting a standard will have important environmental, economic, or social consequences, we envisage an approach in which a social and economic analysis forms part of the overall decision in conjunction with the scientific analysis. The two activities come together in an MCDA that seeks to integrate all the factors that will deliver the required level of environmental protection at an acceptable economic and social cost. If that cost can be defined during problem formulation, this will greatly facilitate the process because it puts limits on what is, and is not, permissible. 

The solution to the problem is obtained by solving mass and energy balances to yield the quantity and state (i.e., composition, temperature, pressure) of all the streams and the utility requirements. Additional parameters for the process equipment, sufficient so that stream specifications are met and the cost of the equipment can be estimated, are calculated. The cost of equipment, raw materials, and utilities is estimated and an economic analysis is carried out. Methods of cost estimation and economic analysis are presented later in this text. This entire procedure may be repeated many times to examine modifications of the process flow sheet or to find optimal values of key process variables. Computer software can greatly simplify these repetitive calculations for the engineer. But even without the need for repetition, the software may simplify the calculations and provide detail and accuracy that would have been impossible otherwise. 

Example 5 Comparison of alternative investments by different profitability methods. A company has three alternative investments which are being considered. Because all three investments are for the same type of unit and yield the same service, only one of the investments can be accepted. The risk factors are the same for all three cases. Company policies, based on the current economic situation, dictate that a minimum annual return on the original investment of 15 percent after taxes must be predicted for any unnecessary investment with interest on investment not included as a cost. (This may be assumed to mean that other equally sound investments yielding a 15 percent return after taxes are available.) Company policies also dictate that, where applicable, straight-line depreciation is used and, for time-value of money interpretations, end-of-year cost and profit analysis is used. Land value and prestartup costs can be ignored. 

Most cost-estimating and economic analysis calculations are easily carried out using spreadsheets. Templates are introduced in the examples throughout the chapter. Blank templates are given in Appendix G and in the online material at http //books. elsevier.com/companions. The more sophisticated software that is used in industry for preliminary estimating is discussed in Section 6.3. 

The detailed economic analyses were based on three distinct systems for which cost and economic data were available. These data may or may not be representative of the costs and systems within each category. These three systems represent a small neighborhood ( 20 kg/day), a small public space ( 100 kg/day), and apublic space size ( I (MX) kg/day). In this analysis, the hydrogen selling prices for the United States or Europe were US 19.0/kg of H2 for the small neighborhood size, US 8.0/kg of H2 for the small public space size, and US 4.0/kg of H2 for the open space size. 

This study is part of a broader research activity of the Department of Agricultural Economics and Engineering. It provides cost and profitability analysis and consequently points out investment opportunities to farmers and other agricultural operators, with respect to the organic fruit production. This contribution draws heavily on a recent article published in Italian (Canavari et al, 2004). 

The means for obtaining high quality, cost effective analytical services are described. These services are essential for accurate and economical analysis with rapid turn around time. Good laboratory practices, including computerized sample tracking, instrument calibration, maintenance of equipment and written documentation of the analytical methods assure high quality of the analytical data. 

The costs of corrosion have been a subject of interest to many researchers and the methods used for data collection and economic analysis are reviewed in chronological... 

DATA COLLECTION AND ECONOMIC ANALYSIS TABLE 2.1 Direct and Indirect Costs of Corrosion 97... 

An in-line inspection system is an integral part of the manufacturing system and therefore has to be included in the global cost and benefit analysis when evaluating the overall investment of the production faciUty. Besides the overall cost of the production equipment, the following economic factors specifically related to the metrology system should be included in the economic analysis (Kunzmann et al. 2005) ... 

These results were obtained from a technical and economic analysis performed by NREL and by New Horizon, Inc., for this project. This has been reviewed by several industrial representatives, updated by ORNL and Energetics, Inc., and reviewed by A.D. Little. The calculations were based on a plant with a capacity of 105 million Ibs/yr BDO. The capital cost of the conventional technology was higher than the new technology. 

Despite the benefits of using fibres and the possibility of reducing the amount of reinforcement, their cost should always be considered and economic analysis should be carried out before a decision is made. 

---