Costs, administration insulation

Optimal economic insulation thickness may be determined Iw various methods. Two of these are the minimum-total-cost method and the incremental-cost method (or marginal-cost method). The minimum-total-cost method involves the actual calculations of lost energy and insulation costs for each insulation thickness. The thickness producing the lowest total cost is the optimal economic solution. The optimum thickness is determined to be the point where the last dollar invested in insulation results in exactly 1 in energy-cost savings ( ETI— Economic Thickness for Industrial Insulation, Conservation Pap. 46, Federal Energy Administration, August 1976). The incremental-cost method provides a simplified and direcl solution for the least-cost thickness. 

---